154
Marketing Plan By: Deanna Reeves Diane Golovin Rebekah Dull Remy Cloutier- Stubbs Alyssa Myers Marketing 495/Marketing Management
Marketing Plan
By:
Deanna Reeves
Diane Golovin
Rebekah Dull
Remy Cloutier- Stubbs
Alyssa Myers
Marketing 495/Marketing Management
Final Report
August 12th, 2018
Table of Contents
Executive Summary………………………………………………………………………….….4-6
Vision and Mission Statement…………………………………………………………………..5-6
Methodology
Primary Research……………………………………………………………………..…...6
Secondary Research…………………………………………………………………….6-7
Situation Analysis
Company Analysis………………………………………………………………………7-8
SWOT Analysis…………………………………………………………………..……8-14
Consumer/Social Forces……………………………………………………...14-15
Competitive Forces……………....…………………………………………...15-18
Economic Forces……………………………………………………………..19-21
Political Forces………………....………………………………………….…21-22
Legal and Regulatory Forces………………………………………………....22-23
Technological Forces………………………………………………………....23-24
Sociocultural Forces………………………………………………………….25-29
The Customer Environment…………………………………………………………..29-34
Current Marketing Objectives and Performance……………………………………..34-43
Developing Competitive Advantages………………………………………………...43-45
Developing a Strategic Focus………………………………………………………...45-48
1
Current Marketing Strategy
Fleece…………………………………………………………………………………48-51
Vests………………………………………………………………………...………..51-54
Rain Jackets…………………………………………………………………………..54-57
Convertible Pants……………………………………………………………………..57-60
Snow Jackets………………………………………………………………………….60-63
Marketing Strategy
Marketing Goals and Objectives……………………………………………………..63-64
Product Strategy……………………………………………………………………...64-69
Pricing Strategy……………………………………………………………………....69-70
Distribution/Supply Chain Strategy………………………………………………….70-71
Integrated Marketing Communication Strategy……………………………...………71-73
Marketing Implementation
Structural Issues………………………………………………………………………73-74
Tactical Marketing Activities………………………………………………………...74-75
Evaluation and Control
Formal Controls………………………………………………………………………75-81
Informal
Controls…………………………………………………………………….81-83
Marketing Audits……………………………………………………………………..83-85
2
Implementation Schedule ……………..…………………………………………..…..…85
Exit Strategy…...……………………………………………………………………………..85-87
Works Cited…………………………………………………………………………………..88-97
Figures………………………………………………………………………………………98-107
3
Executive Summary
Columbia Sportswear (CS) is a nationwide company that has been making gear for over
75 years so people from all over the world can enjoy everything the outdoors has to offer. CS
started as a family business based in Portland, Oregon and has grown into the global company it
is today by “making no-nonsense apparel and footwear to keep you WARM, DRY, COOL, and
PROTECTED no matter what” (A Tested Tough History, n.d.). Throughout CS’s growth from a
small hat company in 1938 to a global firm in over 90 countries, they have stayed true to their
approach of maintaining corporate responsibility company wide (Corporate, n.d.).
Columbia’s strengths consist of having a progressive global strategy, being in the
industry for over 75 years, having eco-friendly products, athleisure-wear, highly trained
employees, competitive prices, and up-to-date technology. Their weaknesses include having a
low physical presence in Europe (revealing a somewhat biased global strategy), implementing
unnecessary middle management cutting costs, releasing clothing with too bright of colors, and
not offering free return shipping. Despite those weaknesses, the company has amazing
opportunities to expand globally, form new partnerships, release more athleisure wear, and
improve its e-commerce operations. Common threats include counterfeit products, increasing
competition, and identity issues outside the United States.
While looking through all the research, we have chosen various marketing strategies and
objectives based on Columbia Sportswear’s SWOT analysis and past performance of our
marketing plan. Our suggested product strategies include releasing more gender-neutral colored
clothing, expanding into Australia with its prAna line (along with introducing shoes and
sunglasses to prAna), sponsoring BMX events and top-riders, and co-branding with “Dude
4
Perfect” to attract millennials. It also includes simplifying products for its millennial target
market, offering free shipping on returns and reinvigorating its Mountain Hardwear (MHW)
brand by offering in-store tent set-up demos, and alpine classes. For the pricing strategy, we
suggest lowering the prices on our less technology-advanced products, in order to offer more
millennial-favored features. We also suggest giving the senior citizens an extra 20 percent off on
every first Tuesday of every month. The company will fine tune their wholesale distribution
process and online sales process so that they can educate the retailers of the products. CS will
also be opening more stores in the underdeveloped markets in Europe. When it comes to
integrated marketing communication strategies, the goal is to build brand awareness for MHW
through marketing, advertising, sales promotions, social media, and blogs. We are also hoping to
reposition MHW within the climbing community.
Implementation of the new marketing strategy relies on MHW social media marketers,
top leadership and middle management of the company. The structural issues that exist with the
implementation of the marketing plan include cost cutting and budgeting from management.
Before the plan is implemented informal controls must be put in place including additional
research and development, human resources, financial resources and capital expenditure.
Conducting the audits of this marketing plan are extensive and are conducted by multiple
personnel within the company. Key audits to test the plan include employee surveys, online
metrics such as engagement, pay-per-click results, and website traffic data. If CS decides to exit
the existing markets, the strategy to do so involves licensing off products, technologies, and
retail operations to third-parties. Selling its MHW brand is also an option.
Vision Statement and Mission Statement
5
Vision Statement: “At Columbia Sportswear, we are committed to building a company of
which we can all be proud-not only of the innovative products we create and the financial results
we achieve, but the manner in which we achieve them. Whether it’s responsible sourcing, giving
back to our communities, or reducing our environmental impact, we believe corporate
responsibility is a companywide effort” (Corporate, n.d.).
Mission Statement: “At Columbia Sportswear, our mission is to design and deliver
authentic, outdoor, high-value products for active consumers of all ages” (Columbia, n.d.).
Methodology
Primary Research
Our primary research consisted of insight provided by a team member who worked as a
sales associate at a CS store for six months. This helped our team in determining the internal
capabilities of the company (strengths and weaknesses) that would have been missed otherwise.
Direct interaction with customers and careful observation revealed unsatisfied needs, which
helped in the creation of the suggested marketing strategy.
For our primary research, we also sent out emails and LinkedIn messages to three MHW
employees in the marketing department: Lina Adams (Senior Marketing Manager - PR, Strategic
Partnerships & Influencer Relations at MHW), Snow Burns (Vice President Of Global
Marketing at MHW), and Ashlee Peterson (Marketing Coordinator at MHW). Our main question
consisted of: “What are the current marketing objectives/goals of Mountain Hardwear and what
specific actions are being taken to reposition Mountain Hardwear as a brand?”
Secondary Research
6
Our secondary research consisted of CS’s recent annual (full-year 2017) and quarterly
reports, online articles, glassdoor.com (for insight from direct employees to identify strengths
and weaknesses), CS’s retail website (for reviews on products, also to identify strengths and
weaknesses), and LinkedIn (for insight into executives and officers). The “Officers and
Directors” page on CS’s website was also useful in identifying roles. We also accessed CS’s
press releases to get a feel for recent promotions and endeavors. This helped us in identifying
what current marketing actions were being taken. The marketing textbook “Strategic Marketing
Problems” by Roger A. Kerin and Robert A. Peterson was also used for recognizing applicable
strategies and other marketing concepts.
Situation Analysis
Company Analysis
CS is a publicly traded company that designs authentic, high-quality outdoor products for
active consumers of all different ages. They sell apparel, accessories, and equipment to be used
during a wide variety of outdoor activities, such as “skiing, snowboarding, hiking, rock climbing,
mountaineering, camping, hunting, fishing, trail running, water sports, yoga, golf, and adventure
travel” (Columbia Sportswear Company, 2017, p. 9). CS was once a privately owned company
that became a Publicly owned company in March of 1998 (Columbia Sportswear Company,
2017). Columbia has earned a global reputation of innovation, quality and performance keeping
outdoor enthusiasts in more than 100 countries, warm, dry, cool, and protected (Columbia
Sportswear Company, 2017).
Size of company- Net sales for the year of 2017 totaled $2.47 billion. The working
capital CS had as of December 31, 2017 was $1.2 billion. At the end of 2017, it had 6,188 full-
7
time equivalent employees. (Columbia Sportswear Company, 2017).
Net income attributable to CS Company in 2017 totaled $105 million. Total assets as of
December 31, 2017 equaled $2.2 billion. (Columbia Sportswear Company, 2017).
SWOT Analysis
Strengths
● Year-round patented technologies, processes and designs create “distinctive competency”
● 3,100 wholesale customers worldwide (vs. 129 retail stores) - eradicates expenses
associated with brick-and mortar stores
● Physical and online presence in the United States, Asia, Latin America, Africa, Middle
East, Europe, and Canada (global strategy)
● Utilizes independent suppliers: specialists in chemistry, engineering, design and materials
research and consumer feedback for product design and innovation
● Works closely with key wholesale customers to reinforce brands position as a leading
outdoor innovator
● Bought out some of its major competitors: Sorel (2000) and Mountain Hardwear (2004).
Provides wide variety of products through multi-branding
● Holistic lifecycle approach influencing social, environmental, ethical, and chemical
factors
● Dedicated customer relationship management department, contributing to high brand
equity
● Over 75 years in the industry (founded long before major competitors; longevity
associated with quality)
8
● Strong free cash flows that allow for expansion into new projects
● 60% of net sales comes in the second half of the year (approx. 90% of operating income)
● Does not exercise long-term contracts with its manufacturers (easy break-off)
● Automation within distribution facilities contributes to faster channel operations
● Staff is trained to be knowledgeable on all technologies (where and how to apply)
● Eco-friendly products: no PFCs intentionally used, dye-free fabric, recycled fabric,
recycled trims (Outdry Eco Jacket)
● Responsible down standard certified (no live plucking, humane treatment, entire supply
chain is audited by 3rd party certification body)
● First to earn the Skin Cancer Foundation seal of recommendation (Omni-Shade
technology)
● Omni-Freeze Zero is the industry’s leading cooling technology
● Longevity of products - with proper care the protection/repellency will last for the life of
the garment
● ReThreads program processes certain jackets to give them a second life
● Technology features transfer to many products, streamlining the customer service
experience
● Hires executives from top competitors like Nike and The North Face (competitive
intelligence)
● Sponsors events - Olympics (international) & Timbers (local) to gain brand recognition
● Creates successful limited-time partnerships (e.g. Star Wars & Paris-based Chloé).
● Strong social media presence and technological infrastructure within company website
● Local artists (e.g. Sam Larson) design custom clothes lines
9
● Columbia Greater Rewards Program rewards purchases and drives repeat business
● In some instances, has lower price (vs. competitors)
● Retail stores have computers where customers can order unavailable products, without
shipping fees
● Mountain Hardwear’s expedition tents have summited more of the world’s top peaks than
any other brand
● Executing brand turnaround for Mountain Hardwear through new hirings
● Seen as both a sporting goods store and athleisure wear provider
● Generous discounts for employees and its “family and friends” (access to employee store)
● Provides temporary discounts for companies surrounding headquarters (e.g. Intel)
● Rejuvenated prAna’s sales and branding by emphasizing important lifestyle features to its
target market
Weaknesses
● Reliance on wholesale sales shifts the “branding.” Low direct-to-consumer business
● Low physical presence in Europe (Europe, the Middle East, and Africa collectively have
25 stores vs. 281 in Latin America & Asia Pacific)
● High seasonality within its business operations; 60% of net sales comes in the second half
of the year (approx. 90% of operating income)
● Do not own or operate manufacturing facilities
● Lack of long-term contracts with manufacturers (no assurance of adequate or timely
production capacity or favorable pricing). Vulnerable to price increases
● Orders from wholesale customers are subject to cancellation (order-by-order basis)
● Patents vulnerable to being copied by competition and counterfeiting activities
10
● Automated distribution facilities may be impacted by computer viruses
● Sales associates within wholesale customer companies not knowledgeable on product
● Retail facilities work with outdated technology (e.g. no chip readers, no system to track
inventory of surrounding CS stores)
● Middle management strongly emphasizes cost cutting and budgeting, despite consistently
improving earnings, which benefit executive management alone. Internal fragmentation.
● High turnover of retail workers reveals little room for growth, minimum wage with low
commission percentage, favoritism, and overworking. No benefits to part-time workers
● Retail workers must buy and wear CS uniform despite low wages
● Occasional discrepancy between quality and price leads to customer dissatisfaction, low
customer loyalty/repeat business, and bad word-of-mouth
● Mountain Hardwear net sales fell by 2% in 2017 despite growth in mountain climbing
activity in the U.S. (not capitalizing)
● Mountain Hardwear’s (retail) partners are not well known in the outdoor community
● Inability to connect with millennials in the U.S.
● Losing sales in Asia (brick-and-mortar stores and wholesale)
● Not seen as “authentic” sporting wear (seen more casual); contradicts brand name
● 60-day return policy (vs. lifetime warranty as with UA)
● Discontinuing/alternating classics due to cost cuts result in loss of loyalty
● Does not offer free shipping for return purchases
● Product colors seem bright and unpractical
● Online product images and sizing details do not reflect true product appearance
● Customers complaints of product sleeves being too long on certain products
11
● Same product has differences in size between colors
● Certain jackets do not have the right degree of warmth based on customer feedback
● Competitors have more aesthetically appealing websites
● Marketing teams and management do not consult front-line workers for advice
● Supporting liberals may cause loss of conservative customers
Opportunities
● Growth in e-commerce transactions (vs. brick-and-mortar stores)
● Influx in direct-to-consumer business transactions
● Elimination of tariffs for imported products from U.S. to Australia
● Growing value in sports sponsorships
● Athletes’ growing appreciation of cotton materials that offer evaporation solutions
● Athletes’ growing appreciation of thermal cooling
● Athletes’ growing appreciation of odor control
● Growth in hiking, yoga, paddle-boarding and BMX activities
● Growing influence on millennial’s of Youtubers and bloggers
● Classes on how-to-use gear (life-saving tips)
● The aging of the U.S. population (providing comfort and warmth)
● Growing trend in apparel market emphasizing gender-neutral styles/features
● Growing trend in apparel market emphasizing athleisure wear
● Millennials desire outdoor products that are less specialized and have more uses
● Millennials appreciate health and fitness that is more lighthearted, and involves friends
● Growth in lifestyle marketing (emphasizing health, wellness, and appreciation for nature)
12
● Scaling back on technology- “how much of this do we really need?”
● Millennials’ engagement with outdoors in simple ways (camping and hiking seen as form
of social interaction versus solitary sport)
● Millennials love brands that emphasize diversity (in messaging and imaging)
● Millennials crave for gear that is both fun and functional (in design, packaging, etc.)
Threats
● Identity issue outside the U.S.
● Competitors who have better price-points = loss of loyalty
● Competitors releasing technologically-advanced products
● Fake CS products overseas may damage brand name and product reputation
● Outdoor industry & fashion industry move at a fast pace
● Rising pay level among workers (both U.S. and China)
● Political climate affects cost of goods. Import tariffs and international trade policy
● Gravitation towards leisure-wear / activities
● Wholesale and retail bankruptcies
● Recession and unemployment rates (less disposable income)
● Unstable environmental currency and import restrictions
● Exchange rates
● Labor disputes (slowdowns)
● Change in environmental regulations and health/safety
● Higher GDPR requirements make higher threat of breaking personal data handling laws
● Cyber security threats may cause less customer activity done online
13
● Hacking of personal data (of customers)
● Bad publicity (e.g. repression inside factories) may cause loss of sales
● Unemployment rates. With people losing its jobs, no money to afford new clothing
● Can lose customers who only buy American-made products
● Can lose customers who do not support illegal immigrants
● Customer misconception that CS is only a winter apparel company
● Consumers are spending more on “experiences” (e.g. travel) rather than items
Consumer/Social Forces
Columbia Sportswear is an industry leader in design, manufacture, and distribution of
outdoor apparel, footwear, accessories, and equipment (Corporate, n.d.). CS currently serves a
global market with (nearly) 7,000 employees, is working to increase its market-share across the
world, and has strategically set its priorities for 2018 to drive global brand awareness and sales
growth through increased, focused-demand creation investments. CS is growing rapidly, has
opened 25 new stores in the last three years, and has expanded into Asia. According to the first
quarter financial statement of 2018, out of the first quarter, 60% of CS sales are inside the U.S
(Columbia Sportswear Company, 2018). In 2017, CS’s sales outside the U.S. increased 9% to
$946.1 million, resulting in 38% of total revenue in 2017 (Columbia Financial Statement, 2017).
Columbia Sportswear’s business is impacted by seasonal trends. Its products are
marketed on a seasonal basis, and its sales are weighted toward the end of the year in the colder
months. In 2017, 60% of CS net sales and about 90% of its operating income came from the
second half of the year, which shows its reliance on the sales in the second half of the year
(Columbia Financial Statement, 2017). The fact that its sales are skewed toward the fall and
14
winter months proves that CS products mostly appeal to consumers living in locations that
experience colder seasons (Columbia Financial Statement, 2017). As temperatures around the
world drop during the fall and winter seasons, the demand for CS products increases, especially
in the outerwear category. But with temperatures rising, this poses a challenge to CS, as 60% of
its net sales were in the second half of the year, and most of its products are focused on outdoor
wear (Columbia Financial Statement, 2017).
Another thing that can affect CS sales is changes in consumer preferences and fashion
trends. CS is working on expanding its products, including more categories in more geographic
areas that are more “fashionable.” If CS fails to predict the newest fashion trends and customer
preferences in a timely matter, CS could face lower sales, excess inventories, and lower profit
margins (Columbia Financial Statement, 2017).
Competitive Forces
There are many competitors in Columbia’s market, including some that have similar or
better products that can be sold at a better price point. There is also less customer loyalty since
Columbia faces many competitors. Additionally, there is the threat of counterfeit products that
are sold at a lower price.
Columbia Sportswear’s largest competitor that designs, manufactures, and
commercializes footwear, apparel, sports equipment and accessories is Nike. Nike’s revenue for
2017 was $34.4 Billion, up 6% from the year before (NIKE, Inc., 2017), while CS revenue was
only $2.47 Billion, but its revenue was up 4% from the previous year (Columbia Sportswear
Company, 2017). Nike’s target market is women in their 20s and 30s, young athletes, and
runners with a motto of “Just Do It”; they purchase from a clothing company that claims it will
15
make you a better athlete and expand human potential (Lutz, 2015). CS’s target market is geared
more towards serving a broad population of consumers who enjoy a wide range of outdoor
activities, including “skiers, snowboarders, mountain climbers, outdoor enthusiasts, hikers,
hunting and fishing enthusiasts, endurance trail runners, golfers and outdoor inspired consumers”
(Columbia Sportswear Company, 2017, p. 2).
Columbia Sportswear identifies as more of an outdoorsy company that sells products that
are environmental and “will keep people warm, dry, cool, and protected so that they can enjoy
the outdoors longer” (Columbia Sportswear Company, 2017, p.2). Over the years, Nike has
expanded from selling shoes, to now selling apparel, equipment, and accessories, a success in
addressing the needs of more market segments. Both CS and Nike sell all of their products
through a large number of outlets worldwide; Nike includes wholesalers, retailers, Nike’s online
store, Nike branded stores, and Niketown retail outlets (Gregory, 2017), while CS includes
wholesale, retail, CS own branded stores, CS outlets, and online sales (Columbia Sportswear
Company, 2017, p. 4). For Nike to maintain a strong brand image it promotes its products
through advertising, personal selling, direct marketing, sales promotions, and public relations
(Gregory, 2017), whereas CS uses online advertising and social media, television and print
publications, experiential events, and consumer-focused public relation efforts (Columbia
Sportswear Company, 2017, p.6). When it comes to the pricing strategy of the marketing mix,
both CS and Nike use the value-based pricing strategy when selling their products, in which they
use customers’ perceptions about the value of its products and how much they are willing to pay
(Gregory, 2017).
Columbia Sportswear’s next competitor that will be analyzed is Under Armour (UA),
which is an American company that manufactures footwear, sportswear, casual apparel, and
16
accessories (Under Armour Inc., 2017). UA’s revenue was $5 Billion for 2017 (Under Armour
Inc., 2017), while CS’s revenue was $2.47 Billion (Columbia Sportswear Company, 2017).
Under Armour’s primary target market consists of athletes between the ages of 18 to 25 and they
have “excelled at marketing to 18-to-35 year old age group,” while one of CS’s biggest
challenges is connecting to the millennials in the U.S. (Gustafson, 2015). UA uses value-based
pricing strategy just like CS and it is well known for its advanced quality (Under Armour Inc.,
2017). UA is based in the United States, but has also expanded globally. They have UA brand
and factory house stores, wholesale, and online shopping stores that ship to more than 200
countries, but they only have a limited number of stores worldwide (Under Armour Inc., 2017).
UA promotes its products by personal selling, salespeople, billboards, TV, Youtube, online,
magazines, and sponsorships (Z. Under, n.d.).
North Face (NF) is the next competitor to analyze against CS. NF had revenues of $3.1
Billion in 2017 (Annual, 2017), vs. CS revenue of $2.47 Billion (Columbia Sportswear
Company, 2017). NF is an American company that manufactures footwear, functional
sportswear, sports equipment, and accessories (Annual, 2017) just like CS, and some people are
more loyal to NF over CS even though CS is more affordable. This is partially because some
people see NF products as a more authentic sporting wear, while CS is seen as more practical
(Compare, n.d.). Another reason is because NF is more of a status symbol than CS, although they
both have become status symbols over the years (Compare, n.d.). NF also has a lifetime warranty
on its products, while CS has a 60-day return policy (Compare). NF’s target market includes
men, women, and children of all ages who are athletes or modern day explorers (Press, n.d.). NF
and CS both use value-based pricing strategy, as they are both known for their high quality
products (Annual, 2017). It is are a company that is based in the United States but have
17
expanded globally just like CS, however NF is seeing strong growth is Asia (Annual, 2017),
while it is a difficult economic and competitive environment for CS (Columbia Sportswear
Company, 2017, p. 28). NF sells its products on its online store, retail stores, and NF Outlet
stores. NF used six percent of its total revenues to promote its products through social media,
word of mouth, sponsoring events, TV, magazines, and radio (Annual, 2017, p. 6), while CS
used five percent of its total net sales (Columbia Sportswear Company, 2017, p. 6).
Patagonia has a much lower revenue than CS for 2017 at $209 Million (Finding, 2018).
Patagonia is an American company that sells top-of-the-line outdoor clothing marketed as
sustainable, which includes sports apparel, casual apparel, sports equipment, and accessories
(Finding, 2018). The target market for Patagonia is environmentally-conscious and upscale
consumers who like to be environmentally-friendly (Beginnings, n.d.); although it is a smaller
company than CS, both are environmentally-conscious (Corporate, n.d.). Patagonia also has
donated one percent of its earnings to preserve and restore the natural environment since 1985,
awarding over 89 million to environmental causes (1%, n.d.). Although CS does not donate a
percentage of its sales, this year the CEO, Tim Boyle, donated 1.5 million to the non-profit
Oregon Harbor of Hope to build a new homeless shelter in its hometown, Portland, Oregon, to
help address the homeless problem (Reaume, 2018). When it comes to Patagonia’s employees,
they have great benefits for full time and part time workers (Patagonia, n.d.), whereas CS has
competitive benefits for its full time employees but not its part time employees (Columbia
Sportswear Employee, n.d.). Patagonia sells its products online, from a catalog, retail stores, and
from independent Patagonia dealers. It promotes its products from word-of-mouth, sponsor
sporting events, environmental fundraisers, and sponsors expeditions all over the world
(Beginnings, n.d.).
18
Economic Forces
With the United States’ economic growth on track, this should increase customer
spending. In May of 2018, the unemployment rate hit a new low, and growth in retail sales
increased (Columbia Sportswear Company, 2018). Additionally, even recent tariff measures will
have minimal impact on the U.S., but the increasing likelihood of a trade war with China is a
downside (Columbia Sportswear Company 2017). The current economic strength is good news
for CS; CS is typically very dependent on consumer discretionary spending and retail sales
patterns. When there is economic uncertainty, sales are very unpredictable for CS and demand is
down, resulting in sales goals not being reached or declining. As mentioned earlier, retail sales
have increased within the past year (Columbia Sportswear Company, 2017), so this is good news
for CS, as its consumers will have more discretionary income to spend on its products.
Columbia Sportswear experienced challenges in the U.S. markets in 2017. CS has
experienced the bankruptcies of its wholesale and retail customers, which resulted in a decline of
sales, causing stores to shutdown (Columbia Sportswear Company, 2017). These conditions led
to a sales decline in wholesale net sales in 2017, with nearly two-thirds of the decrease resulting
from the impact of retail bankruptcies (Columbia Sportswear Company, 2017).
Columbia Sportswear is also subject to risks while doing business internationally. These
risks include the effects of foreign and domestic laws and regulations, foreign or domestic
government fiscal and political crises, and political/economic disputes and sanctions (Columbia
Sportswear Company, 2017). All of these factors can impact CS’s ability to sell its products in
certain markets, or the ability to manufacture products.
19
In South American markets, political and economic turmoil have resulted in currency and
import restrictions, limiting CS’s ability to sell products in that region (Columbia Financial
Statement 2017). Also, Russia consists of a large portion of CS’s non-U.S. sales and operating
income, and significant changes in its political conditions have resulted in adverse effects on
sales. Economic downturns also affect global markets. CS vendors, customers, and other
members of its supply chain may be affected by these downturns.
Economic Threats:
The exchange rates and stability of country currency. In 2016, with the UK’s
“Brexit,” there has been economic uncertainty and volatility in exchange rates. “Brexit” was a
separation of the United Kingdom (UK) from the European Union (EU) in 2016, which has
caused political and economic changes for the UK and other countries (Amadeo, 2018). The day
after “Brexit” was implemented, the Dow fell 610.32 points, and currency markets were also in
turmoil. The Euro also fell 2% to $1.11 (Amadeo, 2018). As exchange rates fall, it is not good
for U.S. stock markets, as it makes American shares more expensive for foreign investors
(Amadeo, 2018). “Brexit” slowed down business growth for companies that operate in Europe,
and U.S. businesses are the most significant investors in Great Britain (The so-called Brexit has
wide implications for the U.S. economy, 2016).
Labor laws. Labor disputes have been reported at CS contract manufacturers. These
disputes have resulted in work slowdowns, lockouts, strikes, and other disruptions. For example,
work slowdowns and stoppages at the ports on the West coast of the U.S. have resulted in delays
and increased costs. Labor disruptions may also result in canceled orders by customers,
unexpected inventory, and reduced revenues and earnings. With new labor laws, minimum wage
rates, and health and insurance costs have increased. CS may be unable to locate, attract, or
20
retain exceptional employees, which will reduce its ability to sell products, and distribution may
also be negatively impacted.
Unemployment rate. As the unemployment rate increases or decreases, CS’s sales will
be impacted. As unemployment rates go up, there will be less disposable income, a reduced
availability of credit, increased savings rates, and consumers may not buy CS products. As
unemployment rates go down, consumers have more money and more discretionary spending
money, leading to more profits.
Political Forces
The political environment, especially in election years, can vastly impact a company that
takes a specific stance. During the 2016 election, CS donated and publicly supported liberal
causes, thus staying active within the scope of the political election (Brown, 2017). This strategy
may only appeal to those who agree or who identify with progressive issues. For those
consumers who care about a company for more than its products or services, this is alienation.
Changes in employment laws, environmental regulations, and health and safety can
negatively affect CS. Conversely, they can positively impact the company as well. Political
figures can take a stand to raise the minimum wage, leaving companies such as CS at a loss with
more labor expenses than they can handle. Cities like Los Angeles and Seattle, whose minimum
wage rates are increasing, can lead to a decrease in presence for CS (Hitlzik, 2017). Those stores
would be substantially more expensive to operate, hurting the company's profit margin (Ro,
2015).
Changes in the political climate, such as the election of Donald Trump, sparks
uncertainty in regard to CS trade policy. Donald Trump has declared America’s economic
21
independence and has imposed tariffs on certain items coming into the United States, such as
steel. Only time will tell what will have a tariff placed on it next. This could be a major concern
for CS as they currently do not manufacture any clothing themselves, but rather import it from
outside the United States (CSI Market, 2017).
Tim Boyle took a political stance by addressing the issue of homelessness in Portland,
Oregon. By announcing he wanted to move the headquarters due to safety concerns in the
downtown area, he received criticism and backlash from the community who felt he was
insensitive to the issue (Schmid, 2017). Homelessness is a current and ongoing issue, not only in
the nation, but Portland specifically. The company’s public stance could affect marketing in
Portland.
Legal and Regulatory Forces
With regard to legal and regulatory forces, CS noted the following in its 2017 annual
report: “In the U.S., the current administration has publicly supported potential trade proposals,
including import tariffs, modifications to international trade policy, and other changes that may
affect U.S. trade relations with other countries, any of which may require us to significantly
modify our current business practices or may otherwise materially and adversely affect our
business” (Columbia Sportswear Company , 2017, p. 23).
The General Data Protection Regulation was adopted by the European Union in 2018 and
reinforces additional requirements for personal data handling. It calls for privacy and process
enhancements, which require additional resources (Columbia Sportswear Company, 2017).
In his blog, SuperOffice, Steven MacDonald stated that companies impacted by GDPR
are required to build in privacy settings into its digital products and websites – and have them
22
switched on by default. Companies also need to regularly conduct privacy impact assessments,
strengthen the way they seek permission to use the data, document the ways they use personal
data, and improve the way they communicate data breaches. In practice, this forces CS to have
customers physically confirm that they want to be contacted. It also means that marketers at CS
are responsible for confirming that users can easily access its data and remove consent for its
use. In addition, GDPR requires CS to legally justify the processing of the personal data
collected, meaning only necessary data should be collected (MacDonald, 2018). Violations of the
regulations will result in significant penalties.
On an international level, CS has been facing pressure in terms of labor costs: “[W]e have
seen significant political pressure and legislative actions to increase the minimum wage rate in
many of the jurisdictions within which our stores are located” (Columbia Sportswear Company,
2017 , p. 21). Giving in to these pressures may result in less profitable stores, store closings,
write-downs of inventory, and an overall negative effect on financial conditions.
In a report made by the Worker Rights Consortium, India’s largest clothing manufacturer,
Shahi Exports, which supplies CS, was accused of brutally repressing attempts by workers to
unionize and stifled an increase in the wages of workers. This repression included “physical
beatings; death threats; gender, caste, and religion-based abuse; threats of mass termination; and
the expulsion from the factory of 15 worker activists” (Bain, 2018, p. 2). Columbia Sportswear
took action by temporarily suspending those accused of violence, while the investigation is
ongoing, however no one was fired (Bain, 2018).
Technological Forces
Overall, consumers have embraced the technical advances of shopping online with 79%
23
of all consumers shopping online (Perez, 2016). With that much online shopping occurring,
there are concerns of cyber security, with 77% of consumers reporting that they do not feel safe
shopping online (Fiorletta, 2014). These concerns are with shopping online in general, not just
with CS. According to CNBC.com, there were two billion records stolen or lost because of cyber
attackers in 2017 (Graham, 2017). With that many records being stolen or lost and with the
overwhelming percentage of consumers being concerned with cyber security, it is a threat that e-
commerce businesses should take seriously.
Another threat in the area of technology is rapidly-changing equipment technologies and
consumer needs. CS has a Performance Innovation Team (PIT) lab based in Beaverton, Oregon
that focuses exclusively on developing and bettering the existing technologies in apparel and
other outdoor-related equipment (Reimers, 2016). Recently, CS debuted its patented OutDry
Extreme Diamond Raincoat with new technology in breathability, durability, and waterproofing.
Specifically with this jacket, the innovation team put an abrasion-resistant membrane on the
outside of the jacket that repels moisture and rain, avoiding what is called “wetting out” in its
industry (Reimers, 2016). It is necessary for CS to continue updating and creating new
technological features in its existing and new products. Failing to do so could lead to the threat of
the company becoming outdated and behind in the tech features of its products.
Another threat for CS is the new and improved technology from competitors in the
outdoor clothing market. Under Armour has been identified as a competitor in our competitive
forces section and is a threat in regard to technology and innovation. UA has leading
technologies in clothing, with innovative products such as “ISO-Chill” which works by
dissipating the heat created from the body, creating a cooling effect (Technology | Under
Armour, n.d.). The need for CS to stay up-to-date in innovation and technology against its many
24
competitors is essential. Failing to do may can be seen as a threat to the company’s viability.
Sociocultural Forces
The USDA Forest Service Southern Research Station recently published a study
revealing that Americans’ are choosing activities that involve viewing and photographing nature
over “traditional” activities such as hunting and fishing. This same study goes on to say that
“...not only are more Americans participating in outdoor recreation, [but] the number of times
they participated in many of the outdoor activities surveyed has grown" (Cordell, 2012, p. 2).
Also, motorized off-road and snow activities grew until about 2005, but ended the decade
at about the same level as 2000. Along with hunting and fishing, backcountry activities stayed
relatively flat and various forms of skiing, including snowboarding, declined during this period
(Cordell, 2012).
The Physical Activity Council and PHIT America recently reported that “4.6 million
people participated in either sport climbing, bouldering or indoor climbing last year [2015],
ranking climbing seventieth on the list of the top 111 activities in America” (More Climbers
Than Ever, 2016, p. 2). The Gen Z population prefer outdoor sports and team sports, providing
those selling climbing gear with a bright future, since Gen Z will shortly come to adulthood and
financial independence (More Climbers Than Ever, 2016).
The growth of the yoga lifestyle has been astonishing. A 2016 article states that “the
number of Americans doing yoga has grown by over 50% in the last four years to over 36
million as of 2016, up from 20.4 million in 2012” (Linn, 2016, p. 1). Additionally, 75% of those
actively participating in yoga also participate in sports or other fitness activities (Linn, 2016).
25
From 2013-2016, trail running saw an 8% increase in the number of participants, yet
stand-up paddling was the top outdoor activity for growth, increasing participation an average of
18%. In 2016, running, jogging and trail running remained the most popular outdoor activities,
yet BMX biking saw the largest growth in participants from 2015 to 2016, at 15% growth.
(Outdoor Recreation Participation: Topline Report 2017, 2017).
The Los Angeles Times published an article in 2016 about the influx of minorities hiking
and camping. To reflect this fact, “A recent survey of nearly 3,000 Americans and Canadians
found that among the 1 million people who began camping for the first time last year, nearly 1 in
5 was black and 11% were Latino, nearly twice the rate for those groups in 2014” (Martin &
Lien, 2016, p. 5).
Marketing Mix How affected by changes
Products (features, benefits, branding) CS has been very successful at seeing the
growth of the yoga movement and reacting by
branding its prAna line successfully. In its
2017 report, CS stated the following: “Over
the past five years, sales at prAna have more
than doubled, demonstrating the power of the
brand’s message of sustainability and healthy,
active, free-spirited lifestyles with consumers”
(Columbia Sportswear Company, 2017, p. 4).
Pricing (value) Excess inventory is sold at discounted prices
26
through CS-owned outlet stores or third-party
liquidation channels (Columbia Sportswear
Company, 2017). Declining activities like
skiing and snowboarding may reflect in larger
amounts of discounted clothing in those
categories.
Distribution & supply chain (convenience,
efficiency)
Since more Americans are participating in
outdoor activities, an expanded supply chain
is required to fulfill all needs. Columbia
Sportswear is enhancing its information
systems and supply chain operations through
Project CONNECT (Columbia Sportswear
Company, 2017).
Promotion (message content, delivery,
feedback)
In the fall of 2017, CS launched a new
seasonal campaign titled “Columbia Warm,”
with a focus on a partnership and outfitting
deal with the UK National Parks system,
which correlated with viewing and
photographing nature (Columbia Sportswear
Company, 2017).
People (human resource issues) By understanding that minorities are gaining
interest in outdoor activities and must have
27
someone they can relate to within the
company, CS is hiring employees without
regard to race, color, national origin or
ancestry.
With regard to ethical and social responsibility issues, CS ensures that its prAna line of
apparel and accessories are “designed and manufactured with an emphasis on sustainable
materials and processes” (Columbia Sportswear Company, 2017, p. 8). This approach seems to
have paid off, based on the following statement: “Over the past five years, sales at prAna have
more than doubled, demonstrating the power of the brand’s message of sustainability and
healthy, active, free-spirited lifestyles with consumers” (Columbia Sportswear Company, 2017,
p. 4). The issue of sustainability is expected to grow as more and more concern is placed on
protecting our environment.
In its 2017 annual report, CS stated that about 64% of its products (excluding footwear) is
manufactured in Vietnam and China (Columbia Sportswear Company, 2017). Since CS sources
its products around the globe, it requires that these operations are handled in a legal, ethical, and
fair manner. Regular monitoring is exercised by personnel from liaison offices to determine
whether or not standards are being met.
This affects customers in two ways: some customers desire to buy only from producers
who manufacture in America, concerned about the social factor of available resources. Not only
is this better for the environment, but it also provides jobs for future generations (serving as a
“guaranteed job”), promotes American independence (by eliminating reliance on exports of other
28
countries), and guarantees a high quality of goods (10 Reasons Why You Should Buy American-
Made Products, 2016).
That being said, a recent poll revealed that only 32% of respondents consider American-
made products as a very important decision factor in the buying process. Price is a more
important factor at 69% (Long, 2017). Referring back to the Shahi Exports example under Legal
and Regulatory Forces, by keeping jobs in America we guarantee safe and fair working
conditions. The issue of overseas manufacturing may change in the future as the Trump
administration is fervently working at getting manufacturing jobs back to America to bolster the
economy.
Currently, CS is taking is taking on an ethical responsibility and protesting Trump’s “zero
tolerance” policies targeted toward illegal immigrants. In an interview with The Oregonian, Tim
Boyle stated that “International customers hesitate to visit the Northwest Portland company's
headquarters for fear they could get stuck here in some immigration foul-up” (Manning, 2018, p.
9). He goes on to say that “[S]ome of his own IT employees who are in this country on a green
card don't want to travel to China to work on a technology project due to the same concern”
(Manning, 2018, p. 9). Nike is taking a similar stand. It is not clear how this issue is to change in
the future, yet measures are being taken to soften the blows previously dealt to illegal
immigrants.
The Customer Environment
Columbia Sportswear is one of the largest outdoor and active lifestyle apparel and
footwear companies in the world. CS was founded in Portland, Oregon in 1938 and became
global in over 90 countries. CS products have earned an international reputation for innovation,
29
performance, and quality at a reasonable price (Columbia Sportswear Company, 2017, p. 2).
The durability and functionality of its products make them ideal for serving a broad
population of consumers who enjoy a wide range of outdoor activities, including “skiers,
snowboarders, mountain climbers, outdoor enthusiasts, hikers, hunting and fishing enthusiasts,
endurance trail runners, golfers and outdoor inspired consumers” (Columbia Sportswear
Company, 2017, p.2).
Consumers’ desire for CS products are affected by many different variables, including
how popular the outdoor activity and active lifestyles are where they are sold, the changing
design trends, seasonal weather, consumer adoption of performance technology, discretionary
consumer shopping and spending patterns, and the competitor alternatives available (Columbia
Sportswear Company, 2017, p. 3). CS apparel and footwear is most popularly known and used in
winter sports, therefore sales are weighted heavily toward the third and fourth quarters
(Columbia Sportswear Company, 2017, p. 3).
The important players in the purchase process for CS products are the purchasers who
focus on business-to-business, wholesalers and retailers, and the active, outdoor enthusiasts who
buy their products from the retailer or through one of CS’s outlets or online (Columbia
Sportswear Company, 2017, p. 4). The end product users are the outdoor enthusiasts. Purchase
influencers, who influence the decision and make recommendations, include friends and family
who love the products, CS employees, and retail employees (Columbia Sportswear Company,
2017, p. 4).
Depending on what outdoor sport activity someone is interested in, CS has unique
performance benefits to fulfill all its consumers’ needs. Whether the outdoor activity is in the hot
sun or the cold snow, CS designs innovative and functional products. These products are
30
designed to keep people warm, cool, dry, or and protected to ensure its consumers get to enjoy
their activities longer and in greater comfort. Along with the technological performance, CS also
relies heavily on the product design and fit so people can look good while doing the activities
they enjoy (Columbia Sportswear Company, 2017, p. 4).
Consumers who purchase CS products are usually buying them for a solution (Product
Design, n.d.). These solutions could include performance benefits, features that the products
have that others lack, style, brand name, functionality, durability, and price. CS products are
used for all types of outdoor activities for the outdoor enthusiast or for everyday wear.
Columbia Sportswear is an ethical company that makes every effort to respect and
preserve natural resources. It’s goal is to limit its impact on the communities they touch, while
sustaining the environment we all love (Corporate, n.d.). In efforts to protect clean water, they
buy materials that are dyed without water and follow very strict regulations (Corporate, n.d.). CS
not only takes care of our environment, but they also invest in charitable organizations around
the world to help out people (Corporate, n.d.).
Columbia Sportswear’s products are purchased through a variety of different distribution
channels, wholesale channels, direct-to-consumer channels, independent international
distributors, and licenses. Most of CS’s sales are through wholesale channels, which include
small, independently-operated specialty outdoor and sporting goods stores, internet retailers,
regional, national, and international sporting good chains, as well as large regional, national, and
international department store chains (Columbia Sportswear Company, 2017, p.4). Its products
are also sold on its own branded and outlet retail stores and online (e-commerce) stores
(Columbia Sportswear Company, 2017, p.4).
Columbia Sportswear started selling online in 2009 and since then e-commerce has
31
changed the way most consumers shop. In 2016, CS projected that 90% of its business would be
online, which is up 50% from 2015 (Tepper, 2017).
Columbia Sportswear has a wide range of different purchase behaviors that vary
throughout the year, such as its Professional Purchase Program (Professional, n.d.). This
program allows certain professionals, including athletes, national ski patrol, outdoor guides,
search and rescue members, certain people in the media, event management personnel, non-
profits, governmental, and educational professionals to purchase CS products at a discounted
price (Professional, n.d.). These all increase its sales depending on certain activities going on
around the world, like competitions, filming, events, festivals, and outdoor activity functions
(Professional, n.d.). A few other things can affect purchasing behavior: how popular the outdoor
activity and active lifestyles are where they are sold, the changing design trends, seasonal
weather, consumer adoption of performance technology, discretionary consumer shopping and
spending patterns, and the competitor alternatives available (Columbia Sportswear Company,
2017, p. 3).
Columbia Sportswear’s products have many advantages over the competitor’s products
because CS products are very environmentally-friendly, its prices are lower than that of the
leading competitors, they have very few to compete with, they have a reputation for innovation
and performance (Company, n.d.), promoting high-performance by having professional-wear
products at a lower price, and they have been around since 1938 (Company, n.d.).
Brand loyalty can affect consumers’ behavior and can be a problem if they are loyal to
another company and not yours. Brand loyalty can give consumers a sense of satisfaction, trust,
and commitment. If customers are satisfied with their recent purchases, it can determine a
purchase pattern for the future, and can enhance craving for the product. “Trust develops positive
32
attitude towards the brand and commitment leads to loyalty towards the brand” (Usman, n.d.).
Another aspect that affects customers’ purchase behaviors is when a product/brand becomes
commodified. This makes that product/brand no longer unique and it is no longer distinguishable
among the other brands.
Consumers who purchase CS products buy from a U.S. direct-to-customer platform that
includes more than 90 company-owned outlet stores, and distinct ecommerce sites for all four
brands and branded stores in select markets (Columbia Sportswear Company, 2017). Due to the
acceleration of consumer shopping preferences on ecommerce sites, Canada’s revenue fell 2%
from bankruptcies and liquidations of some of the best wholesale customers. Columbia
Sportswear ecommerce sites tell the consumer everything they need to know about the product
brand, technology, and style stories (Columbia Sportswear Company, 2017). Columbia
Sportswear has also “expanded into the leading online wholesale channels that are viewed as
brand-enhancing venues by today’s consumers, where we can offer strong brand presentations
and broad assortments, and where consumers enjoy outstanding service and fast delivery”
(Columbia Sportswear Company, 2017).
Potential customers might not purchase CS products because some of its products tend to
be expensive. CS has more reasonably priced products than its leading rival, Nike, but they do
have some jackets that can range from $100 to $1000 (Snow Jackets, 2018) which can be too
expensive for some people. CS also has many competitors with similar products, but some
potential customers may prefer another product or have brand loyalty toward another company
(Better Business Bureau, 2015).
Additionally, other competitors might have features in their products that potential
customers prefer over CS. Columbia Sportswear is an outdoor apparel company, and other
33
companies, such as Nike, Adidas, have sports-specific products and products that are endorsed
by famous athletes. Potential customers might be looking for a basketball shoe, or a soccer cleat,
and CS will not be able to fulfill this need.
Current Marketing Objectives and Performance
Review of current marketing goals and objectives
The main goal of CS's marketing is to create innovative solutions to consumer needs
(Columbia Sportswear Company, 2017, p. 4) within their outdoor industry. Not only do they
want to create innovative products, but CS wants to communicate the benefits of these products.
CS’s specifically states that their goal is to educate consumers by delivering “consistent
messages about the performance benefits, features and styling of our products within each of our
brands” (Columbia Sportswear Company, 2017, p. 12). Marketing objectives for the company
include consumer-first initiatives, responding to consumer demand, and responding to industry
trends.
1. Consumer-first Initiatives: In 2017, CS created a “consumer-first initiative” with
the goal of creating an enhanced customer experience (Columbia Sportswear
Company, 2017, p. 5). This initiative is the creation and development of their
online platform and IT systems infrastructure to to support consumers. The
consumer-first initiatives directly supports the company's goal of creating
innovative solutions to consumer needs (Columbia Sportswear Company, 2017, p.
5). With all IT systems communicating, this creates the consistent messaging for
consumers across all marketing platforms and campaigns.
2. Responding to Industry Trends: Responding to the industry trends is a CS
34
marketing objective that supports the company's goals. CS anticipates and
responds to trends in the market by creating new products while clearly
communicating the features of them to consumers (Columbia Sportswear
Company, 2017, p. 3). In marketing these products, CS creates persuasive and
memorable marketing communications (Columbia Sportswear Company, 2017,
p.3).
3. Consumer Demand Responses: Not only does the company take into
consideration the industry trends, but they also consider consumer preferences
when developing new products (Columbia Sportswear Company, 2017, p.3).
Their objective is to market these products created with the consumer preferences
in mind, going back to the goal of educating consumers of the benefits of CS
products. The company invests approximately 5% of their net sales into marketing
programs to achieve their goals. (Columbia Sportswear Company, 2017, p. 6) The
goals and objectives of CS are being achieved through four main methods,
according to the 2017 Annual Report to Shareholders.
4. Campaigns with CTA’s: The company reports that more of their marketing
campaigns are including a ‘Call to Action’ for consumers. This encourages
consumers to take action with the content they view, not just view it. By using
CTA’s in their marketing efforts in regards to the performance, benefits and
features of their products, this contributes to achieving the organizational goal.
5. Campaign Projects: The company creates internal results based projects to drive
revenue, generate saving and improve the effectiveness of their marketing efforts.
By creating and running internal campaigns, the company can make strategic
35
decisions for their marketing efforts.
6. Relationships with Key Wholesalers: CS focusses on a relationship based strategy
with their key wholesalers through “cooperative online, television, radio and print
advertising campaigns”(Columbia Sportswear Company, 2017, p. 12). By having
strong wholesale relationships they are able to reinforce consistent brand
messages and information in regards to the performance of their products.
7. Digital Marketing and Social Media: The company uses social media marketing
to communicate with consumers to build strong relationships with them.
Consumers are able to interact with the CS brands, (Columbia Sportswear
Company, 2017, p. 12).
The mission statement is the following: “at Columbia Sportswear, our mission is to
design and deliver authentic, outdoor, high-value products for active consumers of all ages”
(Columbia, n.d.). While their mission is to create outdoor products that have high-value, their
marketing goal is to communicate with consumers about the benefits and features of these
products. The mission and the goals of the company are consistent and align by being a
consumer centric brand. The company creates products with the consumers preference in mind
and communicates it with them through their marketing efforts (Columbia Sportswear Company,
2017, p.3)
The mission of the organization and their marketing goals are consistent with both the
external environment and the customer environment. Since CS’s products have a wide range of
functionality, they are able to serve a range of customers with different needs. The main
consumer market that they intend to educate and communicate through marketing efforts is the
“active consumer” as described in their mission statement (Columbia, n.d.). The customers of CS
36
are attracted to the design components of the products and the consumers want to look good
while doing activities that they enjoy (Columbia Sportswear Company, 2017, p. 4). CS
marketing goals and objectives are able to successfully communicate with the identified
customer environment by educating the consumers on the product benefits and features. From
the goal of education, consumers can make decisions on what technologies and designs they
want that make them feel good while doing outdoor activities.
While the external environment is rapidly changing due to being a performance based
product, Columbia Sportswear appears to have continued to be consistent with creating the type
of product mentioned in their mission statement, which are authentic, outdoor and high-value
products (Columbia, n.d.). As discussed, in the section “Analysis of External Environment”, CS
appears to be facing multiple threats, specifically in their competition. Competitors such as
Under Armor are creating products high tech products for the outdoor market (Technology |
Under Armour, n.d.). CS is able to be consistent in the external environment against competitors
by sticking to their marketing goals and objectives of creating innovative products and
communicating the benefits of them to the consumer.
Review of current marketing strategy and performance
Columbia Sportswear produces outdoor products for active consumers. They sell apparel,
accessories, and equipment to be used for outdoor activities, such as “snowboarding apparel,
skiwear, ski-goggles, hunting and fishing clothing, sunglasses, gloves, hats and mittens” (Under
Armour Marketing Mix, n.d.). The company’s CEO and Director is quoted saying that he wants
the customers to “be proud to wear our products, and use our accessories and equipment anytime
you step into the Greater Outdoors” (Corporate Responsibility – Explore Columbia, Columbia
Sportswear, n.d.)
37
The pricing of CS products is “having something for everyone.” Based on the products
on its website, there are options of jackets from $40 to $300, proving the wide pricing strategy
CS has (Men's Jackets - Windbreakers & Winter Coats | Columbia Sportswear, n.d.). This is
likely due to the wide range of technological advances in CS products, as discussed previously.
Basic products are on the lower end of the pricing scale, such as a women's t-shirt with CS's logo
(cost $19.99) (Columbia, n.d.). Products with high-end technology built in are on the higher end
of the pricing scale, such as a women’s performance-based fishing shirt that is light and has sun-
shielding technology (cost $45.00) (Columbia, n.d.).
Columbia Sportswear is based in the Pacific Northwest of the U.S., but sells its products
globally in over 90 countries (Columbia Sportswear Marketing Mix, n.d.). Columbia’s products
are purchased through different distribution channels, wholesale channels, direct-to-consumer
channels, such as online, and independent international distributors (Columbia Sportswear
Company, 2017, p.4).
Promotions for CS products can be seen on a variety of platforms, such as television,
online advertisements (Google Ads) and social media. A unique promotion activity that CS does
is cause marketing. Through cause marketing they “able to increase awareness and raise support
for important outdoor industry causes” (Cause Marketing - Product Initiatives | Columbia
Sportswear, n.d.).
Columbia Sportswear is both in the sports & outdoor and apparel industry. Both
industries have grown in the last two years and are projected to continue growing through 2022
by up to $15 million (Statista Market Forecast, n.d). Since CS is in the largest market in the U.S.,
with annual retail-based sales exceeding $290 billion, the projections for companies in this
market are likely to continue improving sales and profitability because of the high consumer
38
demand.
With regard to CS specifically, the company’s gross profit has increased every year with
a positive net income since 2014, from $954,951 in 2014 to $1,159,962 in 2017 (Columbia
Sportswear Company Stock, 2018). This is in comparison to competitors such as UA, which has
a higher gross profit from years 2014-2017, but has a negative net income (Under Armour, Inc.
Class C Stock, 2018).
Review of current and anticipated organizational resources
Columbia Sportswear is performing well financially now with year-over-year increases in
net sales, with $2.5 million in 2017 (Columbia Sportswear Company, 2017, p. 26). The company
offers stocks to raise funds as a contribution to the financial resources of the company and has
steadily increased to nearly $300 per share in 2017 (Columbia Sportswear Company, 2017, p.
25). While the company appears to be performing well at the moment, it is subject to change due
to the market conditions, volatile common stock prices, and control of common stock. The
company has an investment portfolio that is not excluded from the effects of an economic
downturn, if there was one (Columbia Sportswear Company, 2017, p. 12). If an economic
downturn was to occur and if the company portfolio was not diversified properly, this could lead
to a reduction in its financial resources.
The company is also dependent on its common stock as part of its financial resources.
The prices of the company’s common stock has fluctuated substantially over time, causing the
price to be a concern as it pertains to the financial resources of the company. This change is due
to multiple factors, such as “general market conditions, actions by institutional investors to
rapidly accumulate or divest of a substantial number of our shares, fluctuations in financial
results” etc. (Columbia Sportswear Company, 2017, p. 21). There are five related shareholders
39
who own a majority of the common stock, allowing them to make decisions without the
cooperation of other shareholders. If a sale of its stock were to occur, the price of its common
stock could change negatively (Columbia Sportswear Company, 2017, p. 21).
Columbia Sportswear employs thousands of people, with human resources being a major
resource for them. In its 2017 Annual Report to Shareholders, CS identifies key personnel as
being dependent on them. They spend time and resources attainting and training qualified
professionals for management, designers, sales, and technology (Columbia Sportswear
Company, 2017, p. 21). The level of resources they have in the human capacity is likely to
change because of the competition the company faces in finding key personnel worldwide. If
they are not able to attract and retain existing employees, this will not only hurt the human
resources, but could have a negative effect on the financial resources of the company as well.
Another reason the human resource levels could change is due to the labor laws and labor
disputes. When employees are in disagreement about important issues such as pay, they could
strike, causing a disruption in materials, inventory, or even canceled customer orders. In the end,
this would affect the financial resources of CS.
Columbia Sportswear is dependent on the resources of its key suppliers. Some materials
used in products are purchased from a very limited number of sources; this means the
relationship that they have with existing suppliers is important to the production of the products.
In regard to production and getting the products to the customers, they are relying on its
distribution facilities. Its primary distribution facilities are in the United States, France, and
Canada and are highly automated (Columbia Sportswear Company, 2017, p. 19). Being
automated opens the company to multiple risks, such as computer viruses, software and
hardware issues, or power connection disruptions.
40
Multiple resources that Columbia Sportswear relies to bring products to consumers on are
interdependent and by the reduction in one resource, could affect the level of another resource
(Columbia Sportswear Company, 2017, p. 12). To compensate for the potential changes in the
level of resources available to the firm, (financial, capital, human and relationships with their key
suppliers and distribution facilities) the company will need to leverage their strengths with their
current resources. While the economy is stable and profitable, the company could invest in their
resources so if/when the economy declines, they are prepared for it. For example, Columbia
Sportswear could strengthen the relationship with their suppliers now so that in any type of
economy the company will still receive the materials needed to create the products offered. Since
current some of Columbia Sportswear’s distribution facilities are completely automated and are
subject to a number of risks (Columbia Sportswear Company, 2017, p. 19), they could invest in
updating the technology of their automated facilities to reduce the number of risks that could
occur.
Review of current and anticipated cultural and structural issues
Columbia Sportswear has recently experienced changes within the culture of the
organization that could affect the marketing strategy and development, both positively and
negatively (Max, 2018). With regard to customer orientation, CS has adapted to what the
customers need and want. Previously, CS has tried to make the technology invisible, but the
Chairman, Gert Boyle, says they now focus on making it obvious for consumers to see (Max,
2018). While focusing on the development of its products, they focus on four problems
consumers face: “keeping people warm, dry, cool and protected from the sun” (Max, 2018). This
is a positive for the company, aligning its product development and implementation to consumer
needs.
41
The organization is also focused on long-term planning, specifically for demand and
inventory, as well as profitability. With the business model that currently exists, its biggest risk
to capital is inventory (Columbia Sportswear Company, 2017 p. 7). The company develops and
designs seasonal products nearly 12 months prior to orders for wholesalers and 18 months for
consumers (Columbia Sportswear Company, 2017 p. 7). This demonstrates its commitment to
long-term planning throughout the entire process of design, product creation and distribution.
Columbia Sportswear even offers discounts to wholesalers who place orders at least 6 months in
advance (Columbia Sportswear Company, 2017 p. 7). This strategy allows them to cut down on
the risk of inventory management. This is positive for CS, giving them ample amounts of time to
create a marketing strategy and implement it through the desired channels.
The company’s culture with regard to employee satisfaction and morale overall seem to
be high. From reviews on Glassdoor, the general consensus is that CS offers a great working
environment and supportive management, with one review stating, “Great management, flexible
hours, and very polite co-workers” (Columbia Sportswear Reviews. n.d.). One review also
commented on the company’s “friends and family discount” and its volunteer program as a
positive. Unfortunately, multiple reviews revolve around the lack of room for growth or
advancement opportunities. This could have a negative effect on the company due to employees
becoming burned out and not seeing themselves as part of the company in the future.
The recent changes in the key executive positions could be seen as both positive and
negative for the marketing strategy of the company. In 2017, CS announced its strategic
realignment with top management in the company (ISPO, 2017). While Tim Boyle made the
announcement with a positive undertone, stating, "I am confident that the leadership structure we
are announcing today will enhance our ability to successfully execute on our strategic plan and to
42
further drive sustainable, profitable growth” (ISPO, 2017), there could be concerns due to the
unfilled positions. With these changes the organization could be lacking by not operating at full
capacity with each board position filled. Another reason the changes could be seen as negative is
because different people in positions could change the direction of the company’s marketing
strategy, development, and implementation, depending on the power of the position to make
decisions.
Developing Competitive Advantages
Columbia Sportswear is committed to sustainable and profitable growth, always
improving, and upper management has many strategic focuses. Columbia Sportswear first wants
to continue to drive brand awareness and sales growth through increased, focused demand
creation investments (Columbia Financial Statement 2017). This includes improving technology
and increasing global outreach (Columbia Financial Statement 2017).
Columbia also wants to enhance consumer experience and digital capabilities in all its
channels and geographies, expanding and improving local direct-to-consumer (DTC) business
while prioritizing digital platforms (Columbia Financial Statement 2017). The market for
outdoor and active lifestyle apparel, footwear, and equipment are very competitive. Columbia
Sportswear’s main factors to match its strengths are brand strength, product innovation, design,
functionality, durability, price, marketing efforts, and speed of product delivery (Columbia
Financial Statement 2017). If CS follows its main strengths, this can create more opportunity for
additional sales, and match customer needs. Columbia Sportswear should continue to research
what customers are looking for in products, and differentiate its products from its competitors, to
increase this competitive advantage.
43
Columbia Sportswear should look to continue to grow in e-commerce transactions, versus
sales in brick-and-mortar stores. E-commerce transactions are becoming increasingly popular,
and with CS not having as many brick-and-mortar stores as other competitors, CS should look to
selling online as an advantage.
What sets CS apart from its competitors is its willingness to improve its products and
improve its technology to match what its consumers are looking for. Columbia Sportswear
currently offers technology under its Omni line of patents. The line features Omni-Tech, which
is its fabric technology that allows a piece of clothing to be breathable but waterproof. Omni-
Dry, is similar in that it is waterproof, but has four times the air passage capability than Omni-
Tech.
Columbia Sportswear is known for its high level of technology in its outdoor wear, and
they need to use this to its advantage, and let people know about it. With CS already high brand
awareness, CS uses its technology to its advantage, and informs its customers about it. As the
growth in popular activities such as hiking, yoga, paddle-boarding, and outdoor activities keeps
increasing, this presents CS with an opportunity to showcase its superior products. Athletes now
have a growing appreciation of all the technologies that come in its apparel. Athletes are now
searching for products that include more breathable, lighter, thermal clothing, and CS is one of
the industry leaders of outdoor clothing; as these activities get more popular, then CS has the
advantage of all of its outdoor technology versus other competitors.
Columbia Sportswear can look to grow a larger market share in Europe. CS needs to take
advantage of Europe having colder weather which is the season when they have higher profits.
Also with CS high seasonality (60% of net sales come in the second half of the year) (Columbia
Sportswear Company, 2017), CS can take this threat of lower sales in the warmer months, and
44
try to increase sales in the first part of the year, to turn this into an opportunity.
One major problem CS faces is the increase of counterfeit products. Columbia
Sportswear does a lot of outsourcing, which keeps costs down, but also results in them being too
dependent on outside producers (Columbia Sportswear Company, 2017). Outsourcing increases
the risk of its products being counterfeited (Columbia Sportswear Company, 2017). Counterfeits
can tarnish CS brand, and making sure its products are not counterfeited is an advantage to them
(Columbia Sportswear Company, 2017). Columbia Sportswear has, in the past, discovered that
some retailers in Asia are selling private label merchandise which is very similar to CS products
(Columbia Sportswear Company, 2017).
Developing a Strategic Focus
Columbia Sportswear is focused on accelerating its market-share across its geographies
by focusing on four strategic priorities: driving global brand awareness and sales growth through
increased, focused demand creation investments, enhancing consumer experience and digital
capabilities in all of our channels and geographies by expanding and improving global direct-to-
consumer (DTC) operations with supporting processes and systems, and investing in its people
and optimizing its organization across CS’s portfolio of brands (Columbia Sportswear Company,
2017 p. 11) .
As CS is focused on its market share across geographies, this leads CS to invest in
building its CS brand in China, with e-commerce, and expansion of direct and dealer-operated
retail locations. In 2017, CS bought out the remaining 40% of its non-controlling interest in its
China joint venture. This joint venture’s 2017 total net sales were about $168 million, and sales
are expected to achieve low, double-digit percentage growth in 2018 (Columbia Sportswear
45
Company, 2017 p. 11). Columbia Sportswear plans to use the existing management, staff,
dealers, and distribution network that have already helped CS succeed in China.
Additionally, CS is investing in its C1 initiative, which includes the Global Retail
Platform and IT systems infrastructure to support the growth and continued development of its
Omni Channel capabilities (Columbia Sportswear Company, 2018). Its plan with this initiative
is the same as its strategic priorities: to help deliver a better consumer experience, and modernize
and standardize its systems (Columbia Sportswear Company, 2018).
Next, CS is investing in Experience First or “X1.” X1 is an initiative with its direct-to-
consumer operations and is designed to enhance its e-commerce systems to take advantage of the
changes in consumer browsing and purchasing behavior on mobile devices. This includes an
upgrade of its e-commerce platforms to offer improved search, browsing, checkout, loyalty, and
customer care experiences for mobile shoppers (Columbia Sportswear Company, 2018 p. 12).
Another initiative CS is implementing in 2018, is Project CONNECT, which is a
comprehensive assessment of the company’s operating model aimed at aligning its resources to
accelerate the execution of its strategic priorities. Project CONNECT includes goals to increase
revenue and improve marketing effectiveness (Columbia Sportswear Company, 2018).
Columbia Sportswear is starting to shift its focus on becoming relevant and hip among
younger consumers. It is implementing a new ‘Star Wars’ line of jackets which includes features
such as Luke, Leia, and Han coats (1859 Oregon's Magazine, 2018). Additionally, CS has
recently created new partnerships to connect with a new generation, in which online shopping is
the way the shop most efficiently. It also sent Zac Efron, and his brother on a gear-testing
adventure as a promotion, and created a $515 limited edition Sorel boot in the lineup of Chloé, a
chic Paris based online retailer (1859 Oregon's Magazine, 2018). Lastly, CS also teamed up with
46
Manchester United, one of England’s most storied soccer clubs, and became its official apparel
sponsor (1859 Oregon's Magazine, 2018). Gert Boyle states, “We’re trying to differentiate
ourselves from the big athletic brands that heavily rely on athletes to promote its products, but
we certainly get the brand awareness from these unusual connections with popular brands and
personalities” (1859 Oregon's Magazine, 2018).
Columbia Sportswear also has innovative product initiatives through marketing
campaigns, increasing awareness of important outdoor industry causes. First, in ‘I Wear Pink,’
CS and the National Breast Cancer Foundation partner to create an apparel collection which
benefits the foundation and contributes funds to provide mammogram services for those in need
(Cause Marketing - Product Initiatives | Columbia Sportswear, n.d.). Since 2007, this program
has raised over $1 million for the National Breast Cancer Foundation (Cause Marketing -
Product Initiatives | Columbia Sportswear, n.d.). CS is also committed to protecting and
preserving America’s national parks. With the 100th anniversary of the National Park Service,
CS is launching an innovative program with the National Park Foundation with the goal to
educate everyone about all the great natural and cultural resources available in our areas (Cause
Marketing - Product Initiatives | Columbia Sportswear, n.d.).
Columbia Sportswear also partners with The Skin Cancer Foundation (SCF), to help
educate consumers how to safely enjoy the outdoors. Columbia Sportswear’s Omni-shade line
has earned the SCF’s Seal of Recommendation , which is awarded to sun protection products
with a minimum of UPF 30 that meet its specific criteria (Cause Marketing - Product Initiatives |
Columbia Sportswear, n.d.). It is the first international large apparel company to hold this seal
(Cause Marketing - Product Initiatives | Columbia Sportswear, n.d.).
Overall, CS is trying not to be like its competitors which partner with famous athletes. It
47
plans to promote its products with everyday use (1859 Oregon's Magazine, 2018). They will
promote its products with famous people, but not famous athletes because its products are not
specifically designed for a certain team sport or sports athlete (1859 Oregon's Magazine, 2018).
Current Market Strategy (Products)
Product #1 - Columbia Fleece Jacket
Primary Target Markets
Consumers who wear the Columbia fleece jackets are middle aged men and women,
usually in middle to upper class (Fleece, n.d.). Columbia Sportswear “operates in four
geographic segments: (1) The United States, (2) Latin America and Asia Pacific (“LAAP”), (3)
Europe, Middle East and Africa (“EMEA”), and (4) Canada” (Columbia Sportswear Company,
2017, p. 5). In 2017 the United States accounted for 61.6% of net sales, LAAP accounted for
19.3%, EMEA accounted for 11.9%, and Canada accounted for 7.2% of net sales (Columbia
Sportswear Company, 2017, p. 5). Consumers who buy CS Fleece Jackets tend to have brand
loyalty, are environmentally friendly, and value comfort while staying warm. The Columbia
Fleece Jacket is lightweight and very versatile so it is a great jacket for anyone, active or not
(Fleece, n.d.).
In many of the reviews on the Columbia website, it seems to be that people who wear the
Columbia Fleece tend to like to be comfortable while also staying warm doing whatever activity
they love most. “Whether you’re an outdoorsman or woman, love the occasional weekend hike
to clear your mind of the stresses from the week, or are just looking for a great jacket to wear
around town” (Fleece, n.d.). Consumers who buy The CS Fleece Jacket usually buy it for the
48
quality of the product, popularity, name brand, brand loyalty, and functionality (Fleece, n.d.).
Unfulfilled Market Needs
The current needs in the marketplace, especially in the United States that are not being
met from the CS Fleece is the sizing. It shows from the reviews and from the sizing on the
website that the fleece jackets only come in sizes x-small to x-large (Fleece, n.d.). In the U.S. we
have approximately 160 Million people that are obese (The Vast, n.d.) and would not be able to
fit into an x-large fleece.
Market Trends
Columbia Sportswear’s Fleece Jacket has been evolving over the years into a higher
quality product, ranging from thinner-to-thicker fabric and has more options to choose from
(Fleece, n.d.). The fleece has also become more expensive due to an array of competitors and a
much higher demand from the consumers (Fleece, n.d.).
Market Growth
The market for fleece jackets has been growing over the recent years, but due to recent
studies on polyester and acrylic fibers found in our oceans due to clothing made out of these
fabrics, things might change. Patagonia did a recent study that showed, “During laundering, a
single fleece jacket sheds as many as 250,000 synthetic fibers [and] [b]ased on an estimate of
consumers across the world laundering 100,000 Patagonia jackets each year, the amount of fibers
being released into public waterways is equivalent to the amount of plastic in up to 11,900
grocery bags” (O’Connor, 2016). This eventually ends up in our oceans and in our sea-life. This
will take a turn for the worse, especially for all the environmentally conscious consumers. If CS
does not start making a more sustainable clothing line, they could potentially lose customers.
49
Current Marketing Mix
Columbia Sportswear Fleece Jackets range from $12.90 to $75.00 (Fleece, n.d.).
Columbia Sportswear uses a variety of different ways to promote its fleece jackets, including
online advertising and social media, television and print publications, experiential events, and
consumer focused public relation efforts (Columbia Sportswear Company, 2017, p.6).
Columbia Sportswear “operates in four geographic segments: (1) The United States, (2)
Latin America and Asia Pacific (“LAAP”), (3) Europe, Middle East and Africa (“EMEA”), and
(4) Canada” (Columbia Sportswear Company, 2017, p. 5). In 2017 the United States accounted
for 61.6% of net sales, LAAP accounted for 19.3%, EMEA accounted for 11.9%, and Canada
accounted for 7.2% of net sales (Columbia Sportswear Company, 2017, p. 5). The United States
has 3100 wholesalers, and direct-to-consumer consists of 105 outlets and 24 branded stores, plus,
e-commerce websites in the U.S. LAAP has 250 wholesalers, 119 and 162 branded outlets, and
shop-in-shop locations in Japan and Korea. With a joint venture with Swire, they operate 86
retail stores in China. In addition, CS and Swire have e-commerce websites in China with about
50 wholesalers that operate 750 retail locations (Columbia Sportswear Company, 2017, p. 5).
EMEA has 3500 wholesalers with 26 independent international distributors that sell to over 750
wholesale customers, 24 outlets, and 1 branded retail store in Europe. They also have e-
commerce websites in Austria, Belgium, Finland, France, Germany, Ireland, Italy, The
Netherlands, Spain, and the United Kingdom (Columbia Sportswear Company, 2017, p. 6).
Canada has 1000 wholesale customers, 6 outlets retail stores, and e-commerce (Columbia
Sportswear Company, 2017, p. 6).
Current STP
Consumers who wear the Columbia fleece jacket are middle age men and women, usually
50
in the middle to upper class (Fleece, n.d.). Columbia Sportswear’s target market for its fleece
jackets are geared more toward serving a broad population of consumers who enjoy a wide range
of outdoor activities, including skiing, snowboarding, mountain climbing, hiking, hunting and
fishing, endurance trail running, golfing, and just hanging out (Columbia Sportswear Company,
2017, p.2). Columbia Sportswear’s positioning for its fleece jacket is a complete sportswear,
everyday wear, and outerwear product.
Product #2 - Columbia Sportswear Vests
Primary Target Markets
Consumers who wear CS vests are middle aged men and women, usually in the middle to
upper class (Vests, n.d.). Columbia Sportswear “operates in four geographic segments: (1) The
United States, (2) Latin America and Asia Pacific (“LAAP”), (3) Europe, Middle East and Africa
(“EMEA”), and (4) Canada” (Columbia Sportswear Company, 2017, p. 5). In 2017 the United
States accounted for 61.6% of net sales, LAAP accounted for 19.3%, EMEA accounted for
11.9%, and Canada accounted for 7.2% of net sales (Columbia Sportswear Company, 2017, p.
5). Consumers who buy CS Vests tend to have brand loyalty, are environmentally friendly, and
value comfort while keeping their core temperature warm. The CS vests are lightweight and can
be a great addition to layering any outfit, whether one lives an active lifestyle or not (Vests, n.d.).
The CS vests are attractive, comfortable, light, and very versatile. Consumers can wear
them while meandering through the woods or commuting to work, while also retaining their core
body heat (Vests, n.d.). Consumers who buy CS vests usually buy them for the quality of the
product, popularity, name brand, brand loyalty, layering, and functionality (Vests, n.d.).
51
Unfulfilled Market Needs
The current needs in the marketplace, especially in the United States, that are not being
met from the CS vest seems to be the sizing, from all the consumer reviews on the Columbia
website (Vests, n.d.). With all of the different types of vests they make, some seem to run big,
while others tend to run small. Also, when customers want to return items they are charged for
return shipping (Vests, n.d.).
Market Trends
Columbia Sportswear vests and vests in general have become very popular over the years
which makes them in high demand (Best, n.d.), especially with such high competition. Because
vests are in high demand, CS started designing more of a variety of vests that range from fleece,
responsibly sourced down-filled, synthetic insulated, with or without hoods, have pockets inside
and out, are water resistant, have double zippers, and some that are made extra-long (Vests, n.d.).
Some of these vests are made of very high quality which makes them more expensive, like CS’s
new line of vest fillings to ensure the highest industry animal welfare guidelines. These include
synthetic insulation and 100% responsibly-sourced down (Vests, n.d.). Additionally, CS has
patented what they call a Light Rail Zipper that is used on many of its products and has
eliminated the need for sewing tape, resulting in a complete removal of that particular material
from the pockets in its product line (Corporate, n.d.).
Market Growth
The market for CS Vests has evolved over the years and now “they have a technically
advanced product line with something for everyone” (Company, 2018). Whether one is outside
in the woods, sitting around a campfire, hiking, fishing, hunting, doing indoor chores, or
commuting to work, there is a vest for that consumer.
52
Current Marketing Mix
Columbia Sportswear Vests range from $14.98 to $130.00 (Vests, n.d.). Columbia
Sportswear uses a variety of different ways to promote its vests, including online advertising and
social media, television and print publications, experiential events, and consumer-focused public
relation efforts (Columbia Sportswear Company, 2017, p.6).
Columbia Sportswear “operates in four geographic segments: (1) The United States, (2)
Latin America and Asia Pacific (“LAAP”), (3) Europe, Middle East and Africa (“EMEA”), and
(4) Canada” (Columbia Sportswear Company, 2017, p. 5). In 2017, the United States accounted
for 61.6% of net sales, LAAP accounted for 19.3%, EMEA accounted for 11.9%, and Canada
accounted for 7.2% of net sales (Columbia Sportswear Company, 2017, p. 5). The United States
has 3100 wholesalers, the direct-to-consumer consists of 105 outlets and 24 branded stores, plus,
e-commerce websites in the U.S. LAAP has 250 wholesalers, 119 and 162 branded outlets, and
shop-in-shop locations in Japan and Korea. With a joint venture with Swire, they operate 86
retail stores in China. In addition, CS and Swire have e-commerce websites in China with about
50 wholesalers that operate 750 retail locations (Columbia Sportswear Company, 2017, p. 5).
EMEA has 3500 wholesalers with 26 independent international distributors that sell to over 750
wholesale customers, 24 outlet and 1 branded retail store in Europe. They also have e-commerce
websites in Austria, Belgium, Finland, France, Germany, Ireland, Italy, The Netherlands, Spain,
and the United Kingdom (Columbia Sportswear Company, 2017, p. 6). Canada has 1000
wholesale customers, 6 outlets retail, and e-commerce (Columbia Sportswear Company, 2017, p.
6).
Current STP
Consumers who wear Columbia vests are middle aged men and women, usually in the
53
middle to upper class (Vests, n.d.). Columbia Sportswear’s target market for its vests are geared
more towards serving a broad population of consumers who enjoy a wide range of outdoor
activities, including skiing, snowboarding, mountain climbing, hiking, hunting and fishing,
endurance trail running, household chores, and just hanging out (Columbia Sportswear
Company, 2017, p.2). Columbia Sportswear’s positioning for its vests are a complete sportswear,
everyday wear, and as an outerwear product.
Product #3 - Columbia Sportswear Rain Jackets
Primary Target Markets
Consumers who wear the CS Rain Jackets are middle age men and women, usually in the
middle to upper class (Rainwear, n.d.). Columbia Sportswear “operates in four geographic
segments: (1) The United States, (2) Latin America and Asia Pacific (“LAAP”), (3) Europe,
Middle East and Africa (“EMEA”), and (4) Canada” (Columbia Sportswear Company, 2017, p.
5). In 2017, the United States accounted for 61.6% of net sales, LAAP accounted for 19.3%,
EMEA accounted for 11.9%, and Canada accounted for 7.2% of net sales (Columbia Sportswear
Company, 2017, p. 5). Consumers who buy CS Rain Jackets tend to have brand loyalty, are
environmentally friendly, and want to stay warm and dry while doing its outdoor activities
(Rainwear, n.d.). The CS Rain Jackets are made from high quality material making them
waterproof and breathable, while also being lightweight and easily packable for when the sun
comes out, making them ideal for an active lifestyle (Rainwear).
The CS Rain Jackets are lightweight, comfortable, waterproof yet breathable, stylish,
practical, and keep one warm. Consumers can wear them while doing just about anything,
including walking, hiking, fishing, mountain climbing, snowshoeing, snowboarding, skiing, trail
54
running, golfing, hunting, running errands, or just standing out in the rain (Rainwear, n.d.).
Consumers who buy the CS Rain Jackets usually buy them for the quality of the product,
popularity, name brand, brand loyalty, layering, and functionality (Rainwear, n.d.).
Unfulfilled Market Needs
The current needs in the marketplace, especially in the United States, that are not being
met from the CS Rain Jackets, by reading all the customer reviews, seems to be an inside pocket
to keep a cell phone and other valuables; also, the OutDry Hybrid Jacket does not seem to come
with a hook to hang it up. (Rainwear, n.d.). The only other issue that was noticed from all the
reviews was the sizing on most of the jackets seem to run a bit small. Also, when customers want
to return an item, they are charged for return shipping (Rainwear, n.d.).
Market Trends
Rain jackets have always been very popular and in high demand with the more rainy
climates and people wanting to stay warm and dry while doing activities. Columbia Sportswear
has come up with new lines of rain jackets with increased technology to keep people dry,
including CS’s signature line of Omni-Tech that is waterproof, breathable, guaranteed, and its
OutDry Extreme with a membrane outside keeps dry inside (Rainwear). With the new
technology it not only makes these jackets a higher quality product, but also comes with a higher
price. Another technology that raises the price of CS’s rain jackets is it is trying to phase out
Perflourinated Compounds (PFCs) from its products by introducing OutDry Extreme Eco
(OutDry, n.d.). This creates a high performance, environmentally-friendly rain jacket with no
PFCs because PFCs do not break down easily in the environment. Nearly every other major
outdoor brand has not eliminated PFCs from its products because they have acknowledged that
PFC-free alternatives do not provide the durability and performance customers want (OutDry,
55
n.d.).
Market Growth
The market for CS Rain Jackets have evolved over the years and now they have Omni-
Tech that is waterproof, breathable, and guaranteed. Plus, its OutDry Extreme has a membrane
outside, keeping the garment dry inside (Rainwear, n.d.). Columbia Sportswear is also one of the
only outdoor companies to have a high performance, environmentally-friendly rain jacket with
no PFCs (OutDry, n.d.), which could get more people to be brand loyal to CS for moving
forward to new technology and helping the environment.
Current Marketing Mix
Columbia Sportswear’s Rain Jackets range from $24.90 to $500.00 (Rainwear, n.d.).
Columbia Sportswear uses a variety of different ways to promote its rain jackets, including
online advertising and social media, television and print publications, experiential events, and
consumer focused public relation efforts (Columbia Sportswear Company, 2017, p.6).
Columbia Sportswear “operates in four geographic segments: (1) The United States, (2)
Latin America and Asia Pacific (“LAAP”), (3) Europe, Middle East and Africa (“EMEA”), and
(4) Canada” (Columbia Sportswear Company, 2017, p. 5). In 2017 the United States accounted
for 61.6% of net sales, LAAP accounted for 19.3%, EMEA accounted for 11.9%, and Canada
accounted for 7.2% of net sales (Columbia Sportswear Company, 2017, p. 5). The United States
has 3100 wholesalers, the direct-to-consumer consists of 105 outlets and 24 branded stores, plus,
e-commerce websites in the U.S. LAAP has 250 wholesalers, 119 and 162 branded outlets, and
shop-in-shop locations in Japan and Korea. With a joint venture with Swire, they operate 86
retail stores in China. In addition, CS and Swire have e-commerce websites in China with about
50 wholesalers that operate 750 retail locations (Columbia Sportswear Company, 2017, p. 5).
56
EMEA has 3500 wholesalers with 26 independent international distributors that sell to over 750
wholesale customers, 24 outlet and 1 branded retail store in Europe. They also have e-commerce
websites in Austria, Belgium, Finland, France, Germany, Ireland, Italy, The Netherlands, Spain,
and the United Kingdom (Columbia Sportswear Company, 2017, p. 6). Canada has 1000
wholesale customers, 6 outlets retail, and e-commerce (Columbia Sportswear Company, 2017, p.
6).
Current STP
Consumers who wear the Columbia Sportswear rain jackets are middle age men and
women, usually in the middle to upper class (Rainwear, n.d.). Columbia Sportswear’s target
market for its rain jackets are geared more towards serving a broad population of consumers who
enjoy a wide range of outdoor activities, including skiing, snowboarding, mountain climbing,
hiking, hunting and fishing, endurance trail running, walking, working outside, and camping
(Columbia Sportswear Company, 2017, p.2). Columbia Sportswear’s positioning for its rain
jackets are as a complete sportswear, everyday wear, and outerwear product.
Product #4 - Columbia Sportswear Convertible Pants
Primary Target Markets
Consumers who wear the CS Convertible Pants range from young adults to grown men
and women, usually in the middle to upper class (Sites, n.d.). Columbia Sportswear “operates in
four geographic segments: (1) The United States, (2) Latin America and Asia Pacific (“LAAP”),
(3) Europe, Middle East and Africa (“EMEA”), and (4) Canada” (Columbia Sportswear
Company, 2017, p. 5). In 2017 the United States accounted for 61.6% of net sales, LAAP
57
accounted for 19.3%, EMEA accounted for 11.9%, and Canada accounted for 7.2% of net sales
(Columbia Sportswear Company, 2017, p. 5). Consumers who buy CS Convertible Pants tend to
have brand loyalty, are environmentally friendly, while also wanting something that is minimal
and will keep them warm during the cold morning or night, and cool during the hot day (Sites,
n.d.). Columbia Sportswear’s Convertible Pants are made from high quality Omni-Shade and
Omni-Wick material making them durable, quick wicking pants that feature built in sun
protection and plenty of storage; this makes them the perfect choice for active days in warm
weather (Sites, n.d.).
The CS Convertible Pants are lightweight, comfortable, provide sun protection, stain
repellent, and provide zip-off legs that give them versatility in changing weather conditions
which keep one comfortable and protected during active outdoor adventures of all kinds (Sites).
Consumers can wear these pants while doing just about anything, including walking, hiking,
fishing, mountain climbing, snowshoeing, trail running, golfing, hunting, or just doing things
around the house (Sites, n.d.). Consumers who buy the CS Convertible Pants usually buy them
for the quality of the product, popularity, name brand, brand loyalty, layering, and functionality
(Sites, n.d.).
Unfulfilled Market Needs
The current needs in the marketplace, especially in the United States, that are not being
met from the CS Convertible Pants, from reading all the consumer reviews, include the men’s
lining on the inside being very uncomfortable and the fly not being long enough, so men have to
pull them down to use the restroom. For the women’s convertible pants, they seem to run a bit
small and the zipper around the thigh is too tight (Sites, n.d.).
Market Trends
58
Convertible pants have become more popular over the years and they have evolved into a
much better pants/shorts with Omni-Shade and Omni-Wick and Omni-Shield material (Sites,
n.d.). The Omni-Shade material has UPF 50 sun protection, Omni-Wick is a new technology that
pulls moisture away from the skin, and Omni-Shield has advanced repellency to keep from
getting stains (Sites, n.d.). Creating this new technology has not only made these pants a higher
quality product, that is in higher demand, but also is more expensive (Sites, n.d.).
Market Growth
The market for CS Convertible Pants have evolved over the years and now they have
Omni-Shade, Omni-Wick, and Omni-Shield material for its convertible pants, which have made
them more desirable for consumers (Sites, n.d.).
Current Marketing Mix
Columbia Sportswear Convertible Pants range from $40.00 to $75.00 (Sites, n.d.).
Columbia Sportswear uses a variety of different ways to promote its convertible pants, including
online advertising and social media, television and print publications, experiential events, and
consumer-focused public relations efforts (Columbia Sportswear Company, 2017, p.6).
Columbia Sportswear “operates in four geographic segments: (1) The United States, (2)
Latin America and Asia Pacific (“LAAP”), (3) Europe, Middle East and Africa (“EMEA”), and
(4) Canada” (Columbia Sportswear Company, 2017, p. 5). In 2017 the United States accounted
for 61.6% of net sales, LAAP accounted for 19.3%, EMEA accounted for 11.9%, and Canada
accounted for 7.2% of net sales (Columbia Sportswear Company, 2017, p. 5). The United States
has 3100 wholesalers, the direct-to-consumer consists of 105 outlets and 24 branded stores, plus,
e-commerce websites in the U.S. LAAP has 250 wholesalers, 119 and 162 branded outlets, and
shop-in-shop locations in Japan and Korea. With a joint venture with Swire, they operate 86
59
retail stores in China. In addition, CS and Swire have e-commerce websites in China with about
50 wholesalers that operate 750 retail locations (Columbia Sportswear Company, 2017, p. 5).
EMEA has 3500 wholesalers with 26 independent international distributors that sell to over 750
wholesale customers, 24 outlet and 1 branded retail store in Europe. They also have e-commerce
websites in Austria, Belgium, Finland, France, Germany, Ireland, Italy, The Netherlands, Spain,
and the United Kingdom (Columbia Sportswear Company, 2017, p. 6). Canada has 1000
wholesale customers, 6 retail outlets, and e-commerce (Columbia Sportswear Company, 2017, p.
6).
Current STP
Consumers who wear the CS Convertible Pants range from young adults to grown men
and women, usually in the middle to upper class (Sites, n.d.). Columbia Sportswear’s target
market for its convertible pants are geared more towards serving a broad population of
consumers who enjoy a wide range of outdoor activities, including mountain climbing, hiking,
hunting and fishing, endurance trail running, walking, working outside, and camping (Columbia
Sportswear Company, 2017, p.2). Columbia Sportswear’s positioning for its convertible pants
areas a complete sportswear, everyday wear, and outerwear product.
Product #5 - Columbia Sportswear Snow Jackets
Primary Target Markets
Consumers who wear the CS Snow Jackets tend to be grown men and women, usually in
the middle to upper class (Snow, n.d.). Columbia Sportswear “operates in four geographic
segments: (1) The United States, (2) Latin America and Asia Pacific (“LAAP”), (3) Europe,
60
Middle East and Africa (“EMEA”), and (4) Canada” (Columbia Sportswear Company, 2017, p.
5). In 2017 the United States accounted for 61.6% of net sales, LAAP accounted for 19.3%,
EMEA accounted for 11.9%, and Canada accounted for 7.2% of net sales (Columbia Sportswear
Company, 2017, p. 5). Consumers who buy CS Snow Jackets tend to have brand loyalty, are
environmentally friendly, while also wanting something that will keep them warm during the
cold morning or night, whether on the mountain or out for a stroll (Snow, n.d.). Most of CS
Snow Jackets are made from high quality Omni-Tech to keep one dry and Omni-Heat to keep
one warm, making these jackets ideal for winter sports and adventures (Snow, n.d).
Columbia Sportswear Snow Jackets are lightweight, keep you dry with Omni-Tech, keep
one warm with Omni-Heat, have lots of pockets inside and out, have underarm venting, are
windproof, and have many adjustable features to fit just right (Snow, n.d). Plus, these jackets will
keep anyone warm and comfortable doing winter sports and adventures they love, whether it is
snowboarding/skiing down a mountain, snowshoeing around trails, building a snowman, or just
walking around town (Snow, n.d.).
Consumers who buy CS Snow Jackets usually buy them for the quality of the product,
popularity, name brand, brand loyalty, layering, warmth in the winter, and functionality (Snow,
n.d.).
Unfulfilled Market Needs
The current needs in the marketplace, especially in the United States, that are not being
met from the CS Snow Jackets, include zippers being too hard to zip up on the men’s OutDry Ex
Mogul Jacket, the women’s Powder Keg Jacket and Heavenly Long Hooded Jacket having a
couple bad reviews saying they are too lightweight, and the women’s Bugaboo Jacket have had
complaints that the sizing is off, they don’t like the velcro closure instead of snaps, and they have
61
changed some other aspects that people loved about the jacket from previous years (Snow, n.d.).
Market Trends
Columbia Sportswear Snow Jackets have become much better over the years with their
new lines of material, Omni-Heat and Omni-Tech (Snow, n.d.). The Omni-Heat material has
thermal reflective warmth to keep people warmer in cold temperatures, while Omni-Tech is a
new technology that is guaranteed to be waterproof and breathable (Snow, n.d.). Because of the
increasing technology and competitors, snow jackets have been going up in price with the higher
quality (Snow, n.d.).
Market Growth
The market for CS Snow Jackets has evolved over the years and now they have Omni-
Heat and Omni-Tech material to keep its consumers warm and dry, which have made them more
desirable for consumers who enjoy being outdoors in the winter months (Snow, n.d.).
Current Marketing Mix
Columbia Sportswear Snow Jackets range from $29.90 to $1000.00 (Snow, n.d.).
Columbia Sportswear uses a variety of different ways to promote its snow jackets, including
online advertising and social media, television and print publications, experiential events, and
consumer focused public relation efforts (Columbia Sportswear Company, 2017, p.6).
Columbia Sportswear “operates in four geographic segments: (1) The United States, (2)
Latin America and Asia Pacific (“LAAP”), (3) Europe, Middle East and Africa (“EMEA”), and
(4) Canada” (Columbia Sportswear Company, 2017, p. 5). In 2017 the United States accounted
for 61.6% of net sales, LAAP accounted for 19.3%, EMEA accounted for 11.9%, and Canada
accounted for 7.2% of net sales (Columbia Sportswear Company, 2017, p. 5). The United States
62
has 3100 wholesalers, the direct-to-consumer consists of 105 outlets and 24 branded stores, plus,
e-commerce websites in the U.S. LAAP has 250 wholesalers, 119 and 162 branded outlets, and
shop-in-shop locations in Japan and Korea. With a joint venture with Swire, they operate 86
retail stores in China. In addition, CS and Swire have e-commerce websites in China with about
50 wholesalers that operate 750 retail locations (Columbia Sportswear Company, 2017, p. 5).
EMEA has 3500 wholesalers with 26 independent international distributors that sell to over 750
wholesale customers, 24 outlets and 1 branded retail store in Europe. They also have e-
commerce websites in Austria, Belgium, Finland, France, Germany, Ireland, Italy, The
Netherlands, Spain, and the United Kingdom (Columbia Sportswear Company, 2017, p. 6).
Canada has 1000 wholesale customers, 6 retail outlets, and e-commerce (Columbia Sportswear
Company, 2017, p. 6).
Current STP
Consumers who wear the CS Convertible Pants range from little kids to grown men and
women, usually in the middle to upper class (Snow, n.d.). Columbia Sportswear’s target market
for its snow jackets are geared more towards serving a broad population of consumers who enjoy
being outside during the cold winter months while enjoying a wide range of outdoor activities,
such as skiing, snowboarding, snowshoeing, hiking, hunting, walking, working outside, and
camping (Columbia Sportswear Company, 2017, p.2). Columbia Sportswear’s positioning for its
snow jackets are a complete as sportswear, everyday wear, and outerwear product.
Marketing Strategy
Marketing Goals and Objectives
63
Marketing Goal A: Respond to industry trends by emphasizing athleisure wear to
customers.
Objective A1: Sales of athleisure wear lines within CS’s offerings should increase by
15% in 2019. Person responsible: Ethan Pochman - Vice President, Global Brand
Marketing for the Columbia Brand (Officers and Directors, n.d.)
Marketing Goal B: Introduce flourishing prAna line in Australia by capitalizing on
existing, calculated global strategy.
Objective B1: Within five years of operation of prAna’s brick-and-mortar store should
realize 20% of market share (of yoga clothes consumers in Australia). Person
responsible: Nancy Dynan - Vice President, Marketing at prAna Living (Dynan, n.d.)
Marketing Goal C: Build brand awareness and sales growth for MHW by
emphasizing its expedition tents and by utilizing knowledge of newly hired executive
Joe Vernachio (Columbia Sportswear Company Announces Appointment of Joe
Vernachio as Mountain Hardwear Brand President, 2017).
Objective C1: Sell 30% more tents within first two years of promotion. Person
responsible: Lina Adams - Senior Marketing Manager, PR & Influencer Relations at
MHW (Adams, n.d.).
Objective C2: Overall sales for MHW should increase by 15% within those two years .
Person responsible: Lina Adams (Adams, n.d.).
Product Strategy
As the American culture changes and gravitates towards more gender-neutral colors
(Pandey, 2016), one of our recommendations is to eradicate certain product offerings with bright
64
(ex: neon green) unappealing shades and replace them with more soothing, practical colors.
While some jackets get purchased primarily for their bright appearance (for example: joggers in
rainy states appreciate bright blues or yellows, for safety reasons), women’s layering pieces
should be more neutral and soft-toned. Working at CS has revealed many women complaining
about the pink and the purple, asking for more manly tones like clay orange and forest green.
Since consumer feedback for product design and innovation is an important strength of CS’s, the
company should consider making these changes.
Our second product strategy is related to the current lack of tariffs on imports from the
U.S. to Australia (Australia-United States FTA, 2017). CS currently sells to Australian
wholesalers its highly successful prAna line (Store Locator, n.d.). Since Australians are familiar
with the high quality of clothes prAna produces, we believe CS should build its first international
prAna retail store in Australia, thus improving its direct-to-consumer business (Store Locator,
n.d.). This should be directly associated with the action of introducing shoes and sunglasses
within the prAna line. Currently, prAna does not carry shoes nor sunglasses, and its clothing line
does not include the technological features that CS’s relines on. Thus, the shoes should consist of
flip-flops, sandals, and slip-on shoes.
We believe that entering Australia and introducing certain types of shoes and sunglasses
in the prAna brand should be complementary and exclusive to the country. Since Australia
appreciates the lifestyle concepts of yoga, swimming and sustainability (Rustia, 2016),
introducing these products for the first time within this country will serve as a form of “market
testing” (Kerin, & Peterson, 2015).
Our third product strategy is to capitalize on the growth of BMX biking (Outdoor
Recreation Participation: Topline Report 2017, 2017), sports sponsorships (Kelly, 2018), and
65
thermal cooling (Salfino, 2017), CS should sponsor several BMX biking events (USA BMX
Winter Nationals and USA BMX Gator Nationals), while providing several professional BMX
riders (Daniel Dhers and Steven Cisar) with gloves featuring Omni-Freeze technology. CS has
previously partnered with Fishing League Worldwide (FLW and Columbia Sportswear Launch
Extensive Partnership - FLW Fishing: Articles, 2017) and Major League Soccer (Columbia
Sportswear and Major League Soccer Announce New Relationship, 2018). For FLW, CS is the
official apparel outfitter and for MLS the partnership features co-branded outerwear and apparel
for men, women and children. With BMX events, CS should follow its past experience with
FLW and attempt to become the official outfitter for either an event(s) or rider(s).
Our fourth product strategy is to attract millennials by co-branding with “Dude Perfect”
(DP), a YouTube channel featuring sports and entertainment. According to our research, DP is
ideally positioned to take advantage of the Millennial Generation’s love of YouTube (Bazilian,
2017), by promoting the brand to its 133 million subscribers (Dude Perfect Live Subscriber
Count and Stats!, n.d.). The weaknesses of a lot of outdoor brands is that they fail to connect to
millennials because outdoor brands still want to create a product with features for professional
athletes (which is what worked for them before) (Elliott, 2018). Yet millennials want athleisure
wear, functionality, and clothing that reflects their lifestyle goal that nature should be fun and
enjoyed with friends (Lieber, 2015). The DP brand is in line with those goals. The description of
DP’s channel says: “5 Best Friends and a Panda. If you like Sports + Comedy, come join the
Dude Perfect team!”((Dude Perfect Live Subscriber Count and Stats!, n.d.).
The clothing line should feature current summer products since DP mostly films in casual
sportswear, like shorts, shirts, and baseball hats. It should have high-end, techy outerwear and
low-end, no-fuss outerwear. The high-end outerwear is for die-hard fans who want exactly what
66
DP members are wearing in the videos, while low-end outerwear (example: t-shirts with logos)
should be for fans who desire the brand association. By co-branding with DP, CS communicates
to millennials that “yes, it’s ok to enjoy sports in a down-to-earth, energetic fashion, without
running a marathon or climbing Mount Everest. We’re here for you.”
CS already has a strong social media presence, a leg-up in the athleisure-wear section,
and an impressive list of partnerships (including MLS). Its global strategy will allow all those
who view DP’s channel to jump online and check out their website. By co-branding with DP, CS
will flatten out the high seasonality within its business and get closer to satisfying millennials.
This partnership also provides CS with competitive advantage via variety in offerings, being
portrayed as having an adaptive culture, and being seen as a company that values customer
satisfaction. DP has not partnered with a clothing company as of yet and that ought to change.
Similarly, DP has a strong social media presence with 18 million Facebook likes (Dude
Perfect, n.d.), is always associated with sports and fun, and experienced its own share of
partnerships, including Nerf and Whistle Sports Network (Case Studies, n.d.). The partnership
makes sense because both CS and DP are highly involved in sports, one providing athletes (pro
and non-pro) with comfort and style, the other portraying that comfort and style in videos. CS
has for a long time created commercials with humor, starting from when previous CEO Gert
Boyle would test products by forcing her son (current CEO) to walk through a car-wash
(Gianatasio, 2015). Humor is no foreigner to the DP team.
Now, the main reason why millennials are not attracted to CS (in comparison to the older
generation) is not the product but the price. Observing from personal experience and then asking
fellow colleagues, it is clear that around 75% of CS customers are older. They can afford the
offering and they value warmth and comfort higher than their young counterparts. That being
67
said, our fifth product strategy is to release more and more products that are plain, and do not
include any sort of technological features. Technologically-advanced products may be a strength
for the older population, yet it may play a role as more of a weakness for the younger generation
(which is here to stay) (Roberts, 2015). By introducing more patterns and cultural references, and
lowering the price on simple t-shirts, CS will attract more millennials into their stores.
Our sixth product strategy has to do with customer service. Since e-commerce
transactions are on the rise (Zaroban, 2018), CS should take advantage of this and instead of
charging for returns, it should offer free shipping on returns. This does not mean all returns, but
those whose value exceeds $75. A person may be willing to keep (or give away to a friend) a $25
shirt that didn’t fit or wasn’t the right color. Yet, if they purchase a $75+ vest or jacket, and have
to pay an additional fee to ship it back, which they’re more likely to do since the shipping fee is
less than the item price, customer loyalty may be lost.
Our seventh, and final, product strategy is in relation to the tents that MHW offers. MHW
has a very strong reputation within the alpine community, specifically in relation to its tents
(Graepel, 2018). Several reviewers of the Trango 2 Tent, MHW’s most popular, classic tent
offering, have complained that the tent is hard to set up (Trango™ 2 Tent, 2018). One reviewer
has also claimed that the tent manual has images that are backward from the actual tent
(Trango™ 2 Tent, 2018). Three things should be done to fix this. One, MHW’s sales associates
should provide in-store demos on how to set up the tents. This is incredibly important because of
the bad weather conditions of the alps. Alpine climbers who stay out in the cold too long face the
risk of freezing to death. Two, MHW should offer classes, similar to what REI does currently
(Outdoor Classes, Events & Outings, n.d.), for beginner and advanced alpine athletes. Offering
classes is on the rise amongst outdoor brands (Lieber, 2015). And three, MHW’s team should
68
review Trango 2 Tent’s manual and clarify instructions, updating images as required.
Completing these three tasks will increase brand equity and drive repeat business throughout all
of MHW’s offerings.
Pricing Strategy
Our two suggested pricing strategies are related to millennials and the older generation.
In relation to millennials, we want to capitalize on the strength of having lower prices than CS’s
competitors and lower those prices even more. Since millennials highly value functionality, and
functionality no longer means advanced technology, but rather versatility, we want to suggest
expanding the line of non-techy offerings that still have thoughtful features, without the premium
price. This includes keeping the two-way zippers, the extra pockets, and attachable hoods. From
personal observation, anything in the CS store that is priced below $100 is considered “cheap.”
Jackets and other items that did not include any sort of technology would still be “expensive” for
what they offer. Thus, we suggest reducing the “markup” to increase the amount of “traffic
builders,” specifically for the purpose of millennials.
An interesting statistic shows that “by 2030, all baby boomers will be older than age 65.
This will expand the size of the older population so that 1 in every 5 residents will be retirement
age” (US Census Bureau, 2018, p. 1). To take advantage of this, CS should give additional
discounts to its most loyal customers – the baby boomers. It already gives 10% discounts to
seniors who show its ID in store, yet that does not seem to be enough. Our suggestion is that CS
adopt a pricing strategy where every first Tuesday of the month, seniors get an additional 20%
off.
Many of the senior customers associate with the brand due to its long history and because
69
they feel a sense of comradery with the feisty Gert Boyle. Having shopped at CS for decades,
many are familiar with the “classics” and the products that jump-started the company as a whole.
The longevity of the products is what keeps them coming back for more, purchasing either for
themselves or loved ones. That being said, such loyal customers are hard to find, and sure do
deserve an extra discount once a month.
Distribution/Supply Chain Strategy
Our supply chain strategy for CS is to work on the online sales process. This is due to
wholesale creating a barrier between the company and its customers. A full time team of
approximately three people need to constantly check the website for accuracy and ensure all the
links are active. This also means measuring what customers are clicking, where, and how long
they are spending on each page. This data will be used to send out promotional items, reminders,
and coupons to the potential customer.
With regard to wholesale, there is a clear disconnect between CS and the retailer.
Retailers simply place products on a shelf, but do not necessarily have the knowledge or training
to inform customers of the products’ features or benefits. Going forward, we would like to place
a booklet of information on more specialty products for the sales representative to read: winter
jackets, the PFG line, and shoes/ hiking boots to start.
To support the sales representative, CS should send its own representative to travel to the
stores where its products are being sold. The sales representative would be there to answer any
questions and further educate the employees about CS products. Having educated and
knowledgeable sales staff adds value in the customer's mind. This will differentiate CS products
from the competitors’.
70
There is also a lack of stores and distribution centers in Europe. Setting up a distribution
center in Europe can keep the cost of freight down while pushing into an undeveloped market.
Because Europe has cold weather, this can be an opportunity for CS to spread its products in a
new area.
The connection to value CS places to its customers is in the form of convenience and
customer support. Consumers can be assured that they will receive support from the company for
the life of the product.
Columbia Sportswear should continue to enhance its information systems through Project
CONNECT. This system should be reevaluated periodically to ensure its performance is optimal.
Challenging market conditions in the United States caused bankruptcy issues with
Mountain Hardware wholesalers which, in turn, caused net sales to decline (Columbia
Sportswear, 2017). During unfavorable market conditions, CS should not rely on wholesalers,
and move away from wholesale and present its offerings through the CS store and online only.
This can be coupled with coupons to certain products.
Integrated Marketing Communication (Promotion) Strategy
Because Mountain Hardware brand’s net sales declined by 2% from the fiscal year 2016,
the promotion strategies’ first priority is interrelated to Marketing Goal C: Build brand
awareness and sales growth for MHW (Columbia Sportswear, 2017 pg.1). This will be
achieved by content marketing, advertising, sales promotions, and social media. Content about
Mountain Hardware’s best-selling item, the Ghost Whisperer Down Hooded Jacket, should be
available for consumers to get more information about. This should include links to Youtuber
71
and blogger reviews, opinions, and final remarks on the product.
Repositioning Mountain Hardware in the mountain climbing community is paramount.
Repositioning will occur through the IMC, by means of promotions at climbing gyms and
hosting events. This will serve one primary purpose: to create brand awareness in the climbing
community, which should be Mountain Hardwares priority.
Content Marketing: sponsoring bloggers, such as Faith Briggs, who has blogged for CS
in the past can reach potential customers far before the sales process has begun (Columbia
Sportswear Company, 2017). Columbia Sportswear's news section on its website is outdated and
does not have any current posts. Current posts should be added every week and include
information to consumers about subjects such as hiking, mountain biking, and fishing, to name a
few. This can inform consumers how to use the company's products while participating in their
favorite activities.
On YouTube, CS should have short how-to videos to showcase consumers using its
products in different sports, and for different and new activities. For example, Columbia could
create a short video where they teach outdoorists how to go bass fishing while wearing some of
its UV blocking long sleeve shirts, talk about the technology of the shirt, and why it is vital to
wear while fishing in the sun.
Advertising: 2.34 Billion people throughout the world partake in some form of social
media (Statista, pg.1). This presents CS with an opportunity to reach its target market for the
Mountain Hardwear line, while maximizing its budget. Pay-per-click ads, placed on social media
websites such as Youtube, Instagram, and Facebook are a cost effective way for Columbia to
promote its rebranded Mountain Hardware line. Consumers would simply click on the
advertisement and the link would take them directly to the product page, bypassing the home
72
page. By doing so, consumers would be one step closer to purchasing the item, cutting out any
excess frustration navigating the website to find the product (Siu, 2013).
Publicity strategy: In the past, Tim Boyle donated to one political side, alienating the
other. It is our recommendation the company refrain from taking political sides that do not
pertain to the company's core values and mission. If insisted upon by the media, the company
should consult a political advisor prior to making any public statements.
Marketing Implementation
Structural Issues
Changes to the firm's structure are inevitable in order for the plan to be implemented. The
Mountain Hardwear line needs to be reconfigured internally in order to be reborn. Positions that
should be added include a Mountain Hardwear specific social media team. This team would be
the major players who are engaging customers on a daily basis and answering any questions they
may have. The team will also take feedback on the company's current offerings and suggestions
about new offerings.
Top leadership in the company cannot simply tell its employees what the plan is, and
expect them to execute. They must be specific and patient with its employees. Ensuring every
employee understands and has the tools to implement will be instrumental in the marketing plan
implementation’s success. Employees must have the ability to be autonomous and to feel heard if
they have a concern. Employee welfare should be the company’s number one focus, as
employees who feel valued and taken care of will make or break a company.
Structural issues in the company stem from a strong emphasis by middle management on
73
cost cutting and budgeting. These activities benefit senior management, frustrate hourly
employees, and foster low morale. This internal fragmentation causes a riff between employees
and the company, distancing CS from accurately executing its mission.
These issues, directly relate to the high turnover rate with hourly workers. Retail
employees in the company are hired, and kept at a low wage with no benefits. In addition to low
wages, employees are expected to purchase CS uniforms that are mandatory to wear.
This cost cutting has led CS to chose not to adopt recent technology. Their retail stores do
not have chip readers. They also do not have software to track inventory of nearby stores to help
employees. These issues can severely cripple a company such as CS.
These problems all lead to the problem of marketing teams and management do not
solicit its ground employees for input. Because of that, there are a few prominent tactical
marketing activities that need to be addressed.
Tactical Marketing Activities
CS should first implement a set of benefits for its hourly employees that not only attracts
prospective employees, but retains current employees as well. CS cannot move forward in its
operations without taking care of its employees. Benefits should include scheduled and non
scheduled raises to reward employees, and to keep wages in moving forward in proportion to the
living wage, as well as refer a friend program, and giving its employees free and discounted CS
gear. Programs such as the refer a friend program reward employees with a monetary amount
while supplying the company with the same quality of workers.
The company desperately needs and should encourage the input of its employees. There
74
are several insights that can only be provided by front line employees. These employees should
be rewarded and feel valued by CS. Other tactical marketing activities are included in Exhibit 2
and follow the below structure:
Evaluation and Control
Formal Controls
Before the marketing plan can be implemented there are a few types of input controls that
must be in place, including additional research and development, additional human resources,
financial resources, and capital expenditures. Adding more research and development will give
our company increased knowledge to develop, design, or enhance the company’s products, or
technologies used on the products. Also, with creating new products it will lead to adding new
features to some of the old favorite products. Additional human resources will be needed if we
are going to be entering new markets internationally, therefore, we will be needing to hire more
people to work at the new store locations. For any company, big or small, liquid assets/cash
which is a financial resource, is needed to carry out the operations of the business and make it
possible for the company to expand.
The types of process controls that will be needed during the execution of the marketing
plan will include a number of different controls, including employee evaluations/compensation
system, management training, and internal communication activities. Employee evaluations are a
great way to measure job performance and apply feedback, which recognizes quality
performance so that you can compensate the employees accordingly. This not only benefits the
75
employee, but the employer as well because great employees doing their job well can take the
company higher. Another process control that is much needed is management training, this
builds on their strengths to mentor and train their team, which in turn creates higher moral and
motivation in all the employees making a great place to work. Also, another process that is
needed is internal communications activities, not only will it bring everyone together as a team
and make it so everyone is on the same page, but it will also motivate employees to work
towards a common goal.
The types of output controls that will be used to measure marketing performance:
Overall performance standards
Overall Performance Standard for Objective A1: Sales volume of athleisure wear lines
should represent 30% of CS’s entire offering by the end of 2019. This means that in every
quarter of 2019, the sales volume of athleisure wear should increase by approximately 3.75% to
reach our goal.
Overall Performance Standard for Objective B1: 20% share of customers in the
Australian yoga offering segment should be gained by the end of the fifth year. This means that
every year, prAna should gain 4% of market share in that geographical area for that offering.
Overall Performance Standard for Objective C1: Profitability should increase
approximately by 30% at the end of the second year. Profitability should increase by 15% in the
first year and an additional 15% in the second year.
Overall Performance Standard for Objective C2: Sales volume should increase by 15%
by the end of the second year. This means that sales volume should increase in all of MHW’s
offering by approximately 7.5% in the first year and an additional 7.5% in the second year.
76
Product performance standards
1. For gender-neutral colored base layers
Core product quality and supplemental quality must remain the same including features
currently present in the “Women’s Midweight stretch Baselayer long sleeve shirt”: Omni-Hea
thermal reflective, Omni-Wick, 4-way comfort stretch, Antimicrobial treatment, and ergonomic
seaming (Women's Midweight Stretch Baselayer Long Sleeve Shirt, n.d.). Colors should not
necessarily be “neutral” (ex: grey or brown) since women consider that to be their least favorite
colors (Bear, 2018). Blue is a color that is loved by both men and women, even though it is
mostly associated with the male gender (Bear, 2018). Quality of color (richness or faintness,
whichever is required) should be judged through market testing.
2. For introducing prAna footwear and sunglasses in Australia
New product innovation – Shoes should be made in a sustainable manner. Shoes made
from faux leather are not acceptable, as they are not as environmentally-friendly as assumed by
the public (Folk, 2017). Options for shoes will be cork (water resistant, durable and easily
recyclable), waxed cotton (also waterproof and durable),tree bark leather (durable and comes in a
unique pattern), and pinatex (derived from cellulose fibers that are extracted from pineapple
leaves) (Folk, 2017). prAna should explore which of these are easily sourced by the company
and what fits in best with the brands image.
Similarly, sunglasses should follow lead in sustainability and be formed from
environmentally-friendly material. This may include bamboo, cork, reclaimed wood or other
hardwoods (9 Eco-Friendly Sunglasses You Can Wear This Summer & Beyond, n.d.). This makes
the material organic, free of chemicals and renewable. Features may also include 100% UV
protection, and scratch-resistant lenses (9 Eco-Friendly Sunglasses You Can Wear This Summer
77
& Beyond, n.d.).
3. For creating products for top BMX bikers
Product specification – Gloves should be similar to “PFG Freezer Zero Fingerless gloves”
including the following features: Omni-Wick, Omni- Freeze (sweat-activated super cooling), and
Omni-Shade (UPF 50 sun protection)( PFG Freezer Zero™ Fingerless Gloves, n.d.). While this
particular product is created for fishing purposes, a lot of reviewers have claimed using it for
activities other than fishing, like kayaking. The “fingerless” portion may be sewed on specifically
for the top riders, based on their preferences. Quality of logos and images/names on gloves should
be vibrant and clearly visible (not smudged).
4. For creating product line with Dude Perfect
Branding- Quality of products with the “DP” logo must be at the same high standard as
the rest of CS’s offerings (both at the high-end and low-end of the price spectrum). The typical
“dp” logo should be visible, with several offerings showcasing the logo in black on turquoise. CS
could feature its logo on the left side of the shirt, and DP’s logo on the right, with YouTubeTV in
big letters in the center below (with the YouTube logo). This is similar to what Adidas completed
with MLS and YouTube partnership (MLS Shop, MLS Store, MLS Gear, Soccer Fan Gear, n.d.).
5. For creating simplified offerings for millennials
Positioning – The positioning that CS is seeking from creating simplified offerings for
millennials is in the following statement: “For millennial’s, CS is the judge-free zone among all
outdoor brands because sports can be enjoyed anywhere, with anyone, as long as you’re
comfortable” (Kerin & Peterson, 2015, p. 154). This communicates that you can wear CS’s
clothes while skiing or camping in your backyard, with your sports team or your friends. A
78
millennial can appreciate all the “Omni’s” the company has to offer without testing it out in
extreme settings meant for test labs and hardcore athletes.
6. For offering free shipping on returns – N/A
7. For providing demos, alpine classes, and manual updates for MHW
Demos must be accompanied with detailed instructions (answering all relevant questions)
and completed from start to finish (from package to set-up tent, ready to use). Alpine classes
must be lead by experienced alpine athletes and provide information that can not be easily found
online (based on personal stories and potential troubles).
Price performance standards
1. Adding more simple, “functional” items for millennials
CS should drive demand for its simple and functional offerings through marketing
activities. This demand should be met with a proper balance of supply, which will limit quantity
of products being sold in outlets, at a discounted price. The standard we propose during the
execution of the marketing plan is to have 75% of items targeted at millennial’s to be sold at
retail stores and online, and only 25% to be sold through outlets. After the marketing plan is
executed, the standard should raise to 90% being sold at retail stores and online, and only 10%
being sold through outlets. This will signify that the suggested product strategy and related
pricing strategy are working satisfactorily.
2. Offering additional discounts for seniors
We believe that giving seniors 20% additional discounts every first Tuesday of the month
will result in great price elasticity. We will consider the suggested pricing strategy successful if
the “elastic demand” is greater than one (once the marketing plan is executed), signifying that a a
79
sum of 30% off (going from a $35 fleece to a $24.50 fleece) will result in a large increase in the
quantity purchased (purchasing two fleeces instead of one fleece)(Kerin & Peterson, 2015, p.
469). As a result, we expect our revenue to increase by .5%. Thus, if in 2017 the revenue was
2,466 M$, we would expect it to climb up to 2,589 M$ based on this pricing strategy alone
(increasing by 123 M$ in a year) (Columbia Sportswear Company, 2017, p. 9).
Fleeces serve as a good example for our price elasticity of demand concept because they
have lots of substitutes (other relatively cheap offerings to stay warm in), uses (layering, wearing
on its own, etc.), and they have a high ratio of price to income of the buyer (Kerin & Peterson,
2015, p. 470). (Note: Our reasoning behind introducing this pricing strategy was not because we
assumed seniors were low-income, but do acknowledge that a decent portion of senior customers
shopping at CS are bargain hunters.)
Distribution Performance Standards
Sales from wholesalers should increase after the first two months of implementation. This
will be evaluated on a weekly and monthly basis after sales associates are properly trained and
have had one month to get to know our products via the literature we’ve distributed to them.
Sales increases must be at least 5% to continue the training program. This will be reevaluated if
sales fall short after the first two months.
Performance standards for establishing a presence in the European market include sales
from the physical retail store. We expect sales to be heavy in the first few months of opening.
This directly relates, and will be measured by our promotion strategies.
IMC (promotion) performance standards
Sales promotion reach, and ad impressions will be the basis for measuring success in the
80
European market. The Australian sales team will have weekly, and monthly sales quotas that will
be managed by a sales manager, and reported back to headquarters. We will also be distributing
customer satisfactions surveys to measure brand awareness, and brand perception. The survey
will also ask recipients if they would like to opt into CS weekly emails. Will also measure the
growth of customers receiving emails since inception.
All objectives should tie back to the mission and values. If a product or line is not
performing well, which will be measured in sales, it should next be determined if it is vital to
Columbia Sportswear’s success, and mission.
Informal Controls
Columbia Sportswear and its leadership staff are committed to building a strong and
progressive human resource strategies to enhance their leadership capability, organizational
development, and career opportunities for their employees. CS has 7,000 full and part-time
global employees who are committed to sustaining their high-quality sales and operating income
growth. CS also focus on their employees at any of their retail locations to give in-store
presentations of their products. CS also has their products for sale at large retail stores such as
Macy’s, Nordstroms, and others. At these retail locations, employees won’t be trained as well on
CS products, and technologies that can properly sell the products to customers.
Additionally, CS is committed to building a company in which they can be proud of.
They like to give back to communities, or reducing environmental impact. CS has been driven
by a commitment to the people and families who live, work and play in the communities in
which they operate (Columbia Corporate Responsibility Report). CS values and promotes
diversity in its workplace, and has a culture of honesty, respect and trust, and are committed to
81
an environment where equal employment opportunities are available to all applicants.
Columbia Sportswear has a Social Responsibility program called Standards of
Manufacturing Practices (SMP) (Columbia Sport, "Social Responsibility | Columbia
Sportswear"). In these practices, CS products are manufactured at independent factories around
the world. CS values, and ethical and fair treatment of people, and are committed to people with
who they partner with share these values (Columbia Sport, "Social Responsibility | Columbia
Sportswear"). If employees are happy and feel valued, they will implement the marketing plan
to the most of their capability. CS focuses on making their employees feel valued, so they are
always satisfied and committed to their work (Columbia Sport, "Social Responsibility |
Columbia Sportswear").
As competitors become increasingly skilled at replicating products companies seek new
ways to turn resources into a competitive advantage (Pant, 2001). Management consultants,
have suggested several initiatives companies can implement to enhance employee knowledge,
which also improves competitiveness (Pant, 2001). Activities like organizational learning,
empowerment, and open book management all increase the decision making and strategic
participation of employees.
Laurie W. Pant states that sociobiologists explain the use of informal controls to
encourage worker initiative as the natural process of adaptation to survive (Pant, 2001). For
example, to meet or exceed competition, firms draw on employees knowledge of customers and
initiative (Pant, 2001). Acquiring and retaining knowledgeable employees is imperative to
businesses, and healthy firms increasingly rely on developing and maintaining a knowledge as a
necessary condition of survival in their competitive marketplace (Pant, 2001). CS should
continue to invest in developing, and retaining top employees as a necessary condition to survive
82
in such a competitive marketplace.
Marketing Audits
The goals of Columbia Sportswear’s new marketing strategy revolve around building
awareness, entering new markets, and improving internal communication. The goals and
activities should be monitored appropriately per activity.
Social components such as having bloggers and YouTubers review products (Ghost
Whisperer Down Hooded Jacket) to increase awareness and product knowledge among the target
market. The activities of pay-per-click, advertising, social media and sales promotion are to be
monitored by Lina Adams, Senior Marketing Manager, PR & Influencer Relations at MHW.
Specific time based measurements include, social engagement, organic website traffic growth, as
well as conversion rates (Davis, July 2018). These measurements will effectively measure the
number of engagements on the bloggers/Youtubers review videos, as well as the direct traffic
from the videos to the website with the ultimate goal of converting a viewer into a customer.
Entering new markets include both by methods of brick-and-mortar and e-commerce.
Entering a new market is an entire company wide effort with multiple measurements and
personnel responsible for conducting audits. Building a brick-and-mortar in Northern Europe
includes measures of timeline and deadline completion, social engagement of awareness
campaign of new market. The personnel responsible for conducting the audit of if the objectives
are being met include Matthieu Schegg (Vice President, EMEA General Manager) and Patricia
Higgins (Vice President, E-Commerce). While Matthieu Schegg would be conducting audits of
the brick-and-mortar expansion, Patricia Higgins would be overseeing the creation of the website
and implementation of summer products in Australia. Measurements include the timeline and
83
deadlines for completion of the website and the campaigns targeted to the Australia market.
Specific measurements include advertising results on social media and pay-per-click ads as well
as website traffic sources and numbers.
Improving internal communication focuses on employee morale and creating happier
employees to have more satisfied customers. Measurements include sales numbers month to
month, customer service calls resolved, and questionnaires answered by employees from before,
during and after implementation of objectives. Questionnaires can include opinions from
employees in regards to the meeting schedules and the team building exercises. These activities
and the audits of them are to be overseen by Richelle Luther, the Senior Vice President and a
Chief Human Resources Officer.
If the above measurements and audits conducted by the appropriate personnel indicate
that the marketing objectives will not be met, the marketing plan can be improved by the
following:
1. Corrective action can be taken with social campaigns: if audits of pay-per-click and
advertising on social media provide insight to low engagement or low sales, many aspects
can be changed. When advertising online, factors such as demographic, age, location, and
interest can all be changed to better focus the campaign to reach the most consumers that
could be interested in CS products.
2. Corrective action can be taken with results from questionnaires: Based on the results
from the audit from employees changes can be made. For example, if the results indicate
that employees are not participating in the type of team building exercises implemented,
the activities could be changed based on the feedback from them.
3. Corrective action can be taken with timelines and project management: Aspects of the
84
new market creation can be changed if the measurements are proving to show that the
project is not moving forward in regards to the timeline. Timeline can be changed or the
key management or project manager could be moved if results show an issue with
personnel.
4. Product selection changes: If audits indicate that consumers are not interested in the
product choice (ex: summer clothes for Australia), CS can evaluate their product
selection and implement the promotion of a new product/category strategy.
The marketing plan can also be altered in whole or part. If marketing strategy audits
reveal that the pricing strategy is incorrect according to the consumer market, it can be corrected.
Changes in the pricing strategy could include an increase or decrease in price of products.
Although our strategy is to resist lowering pricing on classics, maybe consumers will expect that
the classic prices will decrease due to the advanced technologies and higher end products that
Columbia Sportswear has available. In this case, it would be in the best interest of CS to lower
the pricing of their classics, but continue using the other component of the marketing strategy as
is. Since the distribution chain of channels is complex for CS, multiple issues could occur in the
marketing strategy. If audits reveal that there is an issue with getting products from development,
to retailers and ultimately to the customer, changes could include replacement of key distribution
locations/providers or retailers.
Implementation Schedule - Refer to Exhibit 1
Exit strategy
Columbia Sportswear is actively engaged in licensing its products and technologies to
third parties. The OutDry technology and The Pacific Trail brand (acquired in 2006) are two
85
examples. Trademarks are also licensed in the form of apparel, footwear, accessories, equipment,
and home products. In its 2017 annual report, CS claimed that “...from time to time we license
the right to operate retail stores for our brands to third parties, primarily to our independent
international distributors” (Columbia Sportswear Company, 2017, p. 21). As certain products
become outdated, and not purchased, CS will begin to send these products to off-price retailers
for a discounted price. For example, at Ross Dress For Less, an off-price retailer, they sell CS
products for up to 30% off. Columbia’s exit strategy is to slowly license off its products,
technologies, trademarks, and retail operations to third-parties, all the while aiming to develop
products in perpetuity. CS should continue to license their products, as this gives CS an
additional revenue, and more opportunities to sell additional units. In the second quarter of 2018
financial report, CS states that licensing has grown 35% since the second quarter of 2017, driven
by increased net sales by existing licensing partners (Columbia Financial Statement, 2018).
CS specifically the Mountain Hardwear line, could benefit from line simplification.
While this strategy could hurt the company’s market share, CS could see a benefit from reduced
offerings. This will allow CS to aim targeted marketing due to a smaller product line. Savings for
the company stem from reduced inventories and longer production runs (Freeman and Spenner
2012). These savings come in the form of increased profits for the company as a whole, due to
the elimination of the failing product line. Line simplification helps the company focus on
improving its other products.
If the MHW line continues to lose market share and becomes unprofitable, CS should
consider total line divestment. This should only be considered if net sales continue to see a
steady decline. Total line divestment can improve CS return on investment while simultaneously
increasing its growth rate. CS should consider selling the line to another mountain climbing
86
company, such as Black Diamond, who could benefit from adding a predominantly apparel
company to its line up of climbing gear.
87
Figure 1
88
Figure 2
89
90
91
92
93
94
95
96
97
